• Employer loans – If an employer loans an amount to a worker, any deductions linked to the repayment of this loan will not reduce the worker’s minimum wage pay. Again, the crucial point is that any loans should be clearly documented. There is guidance available on National Minimum Wage legislation at Gov.UK. The Advisory, Conciliation and Arbitration Service (ACAS) can also be contacted on 0300 123 1100, and they can give advice to both employers and workers. The HMRC Community Forum is another resource that can be used to ask questions in relation to NMW / NLW.
CIPP comment
The CIPP has been asked whether there will be a delay to the increase to the rates of National Minimum Wage and National Living Wage due to the economic uncertainty being caused by Coronavirus.
We have no reason to believe that any steps are being taken to reverse legislation however we have asked the question of BEIS and will update you with further news if we receive anything further.
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Low Pay Commission consultation on the future of the National Living Wage and National Minimum Wage 26 March 2020 The Low Pay Commission (LPC) is the independent body responsible for advising the government on National Living Wage (NLW) and National Minimum Wage (NMW) levels, and has been tasked by the government with providing recommendations as to what rates should be in operation from April 2021. This information needs to be provided by October 2020. The LPC has launched a consultation to focus on the impact of recent increases to the NLW and NMW, to help to inform its recommendations for the NMW and NLW rates for 2021.
The consultation was published on 12 March 2020 and will close on 11:45pm on 4 June 2020 but the CIPP intends to submit a written response, on behalf of its members, before that point.
The target of reaching 60% of median earnings, as set by the government back in 2015, has been achieved due to the fact that the NLW will increase to £8.72 per hour from 1 April 2020. The government have fixed a new aim for the LPC, of increasing the NLW to two-thirds of median earnings by 2024, alongside expanding the reach of the NLW to those aged 23 and over by 2021 and further, to those aged 21 plus, from 2024.
The ambition for other NMW rates is that they will increase as much as is possible, without having a detrimental effect on employment.
The LPC wishes to collect evidence on the effects of the recent increases to NMW and NLW on both employers and workers, and further views on businesses conditions and the economic outlook. Coronavirus will undoubtedly be discussed in responses that are submitted this year.
The consultation asks about:
• Affordability and effects of an increase in April 2021 to a NLW rate of £9.21. This is the current central projection for next April’s rate, with a likely range of 6 pence above or below this figure • Views on the LPC’s remit to 2024, involving a new NLW target of two-thirds of median earnings and lowering the NLW age threshold to 21. Based on forecasts, the current central projection for the April 2024 NLW rate is £10.69, with a likely range of 30 pence above or below this figure • Views on potential changes to the Apprentice Rate and their effects in particular on younger (16-18 year old) apprentices
The LPC also wants to hear about any impacts that the recent increase to NLW and NMW levels have had on employment and hours, pay and benefits, productivity, prices and profits.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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