PAYROLL INSIGHT
National minimum/living wage compliance
In July, Professional in Payroll, Pensions and Reward invited several industry luminaries to participate in a virtual roundtable on this highly topical issue
Participants Simon Rice-Birchall , partner,
NMW/NLW rates and a number of high- profile cases in the courts have certainly pushed this subject up the priority list for many employers. Additionally, the increasingly visible and – some have reported – overtly aggressive activity by the HM Revenue & Customs (HMRC) NMW compliance teams in opening investigations reminds us that there is still much more that should be done to ensure that this most basic of subjects is more widely understood. Simon Parsons: Employers are currently confused by minimum pay compliance. They do not appear to understand the principle of time or pay and how that relates to nationally set minimum payments. Often employers consider only the make-up hourly rate of pay for hours being paid. Many are not understanding the obligations in relation to work time that is counted but which they are not paying. Equally they are not understanding
the impact of policies in relation to uniform. They continue to not understand the interaction of salary sacrifice arrangements (they are not ‘deductions’ but ‘reduction’), nor deductions which are considered for the benefit of the employer. However, there will over time be an increased focus as HMRC pursues employers for what are criminal breaches of little-understood law. Often employers consider that national minimum pay is a payroll matter, not understanding that the impact of the law extends to working practices across the business. So, are local managers ensuring that they record and pay for work time or attempting to squeeze additional unpaid work out of the workforce? Maria Hartley: The majority of employers will take compliance of NMW/ NLW seriously to avoid the extra workload and where companies take on outsourced work, being investigated or named and shamed would have a huge impact on future bids. Richard Blackwell: In my experience the employers I have worked with all place great emphasis on the application and compliance of the NMW/NLW requirements. HMRC’s public ‘shaming’ of employers that do not comply seems to be working as a quite effective ‘stick’.
Employment, Eversheds Sutherland Samantha Mann MAAT, MCIPPDip, CIPP senior policy and research officer Simon Parsons MSc FCIPPdip MBCS, director of payments, benefits & compliance strategies, SD Worx UK Limited Maria Hartley MCIPPdip , payroll manager, Parkwood Holdings Richard Blackwell, payroll services manager RCS - Care UK To what extent do you think employers place emphasis on ensuring compliance with the NMW/NLW requirements? Simon Rice-Birchall: It varies very much from organisation to organisation. Those that have been investigated place significant emphasis on this. Many that have not been investigated seem unconcerned, focussing often on headline rates of pay without reference to how the NMW is calculated. Samantha Mann: Not nearly enough emphasis is placed upon the minimum wage. However, the increased publicity around the naming and shaming process by the Department of Business, Energy and Industrial Strategy (BEIS) when combined with the increasing reach of the
Simon Rice- Birchall , partner, Employment,
Eversheds Sutherland
| Professional in Payroll, Pensions and Reward | October 2018 | Issue 44 34
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