The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
A report from the National Audit Office (NAO) shows that HMRC has significantly reduced the average time taken to investigate complaints about employers’ non-compliance with the National Minimum Wage; however some complainants still have to wait over 240 days to get their cases resolved. Since the government began enforcing the National Minimum Wage in April 1999, HMRC has identified £68 million in arrears for over 313,000 workers, according to the NAO’s report Ensuring employers comply with National Minimum Wage regulations . The number of workers identified as being owed arrears in 2015-16 was 58,000 compared to 26,000 in 2014-15. The NAO’s analysis of HMRC’s caseload (as at December 2015), shows that 72% of open cases are less than 120 days old compared to 42% in December 2013. The time taken to investigate complaints varies considerably and depends on a number of factors such as the complexity of cases and the co-operation of the employer. “With the implementation of the National Living Wage, it is even more important that the government ensures its compliance programme reflects the changing risks within the labour market, and maintains its progress in ensuring all employers pay the minimum wage. The government also needs to reduce the time it takes to investigate complaints and resolve cases.” The report finds that non-compliance with the National Minimum Wage in the social care sector remains a concern. The Low Pay Commission continues to assess this sector as high risk and has previously reported that up to 10.6% of care workers may not be paid the National Minimum Wage. The Department for Business, Innovation and Skills (BIS) re-classified the social care sector as a high priority sector for 2015-16. There is no accurate overall measure of non-compliance with the National Minimum Wage regulations and, as a result, it has been difficult to assess the effectiveness of HMRC enforcement activities over time. The government has increased the resources available for compliance and enforcement with the National Minimum Wage. The NAO finds that the number of referrals passed to HMRC from the helpline has reduced significantly in the year ending December 2015 from 2,327 in 2015 to 1,340 in 2015. In April 2015, BIS changed the operator of the helpline and is now assessing how this change, and other factors, have affected the number of calls. Both BIS and HMRC have strengthened the sanctions which they are able to apply to non-compliant employers. Since October 2014, BIS has regularly named and shamed non-compliant employers. Between October 2013 and February 2016, it has published the details of 490 employers who failed to pay their workers the National Minimum Wage. Between 2009-10 and 2015-16, HMRC has imposed penalties of nearly £5.6 million on non-compliant employers, and has prosecuted nine employers who fit the criteria set by BIS. Amyas Morse, head of the NAO said:
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Age Discrimination and the National Living Wage 10 June 2016
A debate has taken place in the House of Commons on age discrimination and the National Living Wage (NLW).
The findings of the debate have yet to be published but we would assume they will help inform the Low Pay Commission’s report to government due in October. A debate pack was produced ahead of the meeting which has all relevant minimum wage information to inform the debate, including detail from the Office for Budget Responsibility (OBR) estimating the direct effect the NLW will have on earnings. According to the OBR around ¾ million people aged 25 and over would move from receiving the NMW to the higher NLW. Just under 2 million people would move from having hourly earnings between the £8.25 assumed NMW rate and the £9.35 assumed NLW rate to at least the NLW rate. Hourly earnings of around £9.35 would place an individual at the 16 th percentile of the earnings distributions. Assuming the spillover effects extend to the 25 th percentile implies that an additional 3.5 million people will also be affected, taking the total number of people affected to around 6 million.
Assuming no change in employment hours worked, the NLW would result in a 0.3 per cent increase in whole economy compensation of employees, which employers could respond to in a variety of ways, including:
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