Payroll insight
such conflict. Deductions made for the employer’s use or benefit will reduce the worker’s pay for minimum wage purposes. These deductions remain a common area of error for employers. Don’t be fooled by authorisation granted for the deduction to be made as it isn’t matched in the NMW regulations. Incorrect PRPs A key area that we hope will be addressed by the recent consultation is the limit of PRPs that can be used for salaried hours work, which currently are weekly and monthly only. We know that many other PRPs exist – fortnightly and four-weekly are particularly common in the retail industry. Workers appreciate the reliability of being paid a regular amount throughout the year, indeed every bit as much as workers who are paid weekly or monthly (which we know remain the two most popular PRPs). Survey responses confirm to us that NMW regulations and their application should mirror that of pay as you earn (PAYE) income tax, National Insurance contributions (NICs), and automatic enrolment – to name just a few – in recognition of the wide
variety of PRPs that exist. Note that the wide use and flexibility of different PRPs applied for PAYE income tax, NICs and automatic enrolment is not mirrored in the NMW regulations for salaried hours work. ...NMW regulations don’t mirror other areas of law ... Employer Bulletin (https://bit.ly/2EWJAFD) as the top reasons for employers failing to pay the NMW occur when rates of pay change are: ● ● the annual NMW increase is applied (for PRPs starting on or after 1 April) ● ● workers move up to a new age band as a result of having a birthday, finishing an apprenticeship or when an apprentice age 19 or over completes their first year of their apprenticeship. Ensure that processes are in place to monitor when rates increase. Payroll software is an excellent tool for providing Failure to apply new rates Listed in HMRC’s December 2018
reminders and alerts for birthdays and annual increases; however, this only works when coupled with awareness by the payroll operator. n
Somuchmore… We could have discussed
accommodation, uniforms, working time and so much more besides but space eludes us and so we will leave these discussions for another day. The consultation included a final section which asked whether there are any other NMW rules which penalise employers without protecting workers from detriment? We know the answer to this is yes and although the consultation has now closed the CIPP policy and research team haven’t. Accordingly, we are keen to hear more views as we are hopeful that this is the beginning of a conversation that will see the NMW regulations become fit for purpose for a 21st century workforce where employment is aspiring to be ‘fair and decent’ for all.
Keep your comments coming to policy@cipp.org.uk as they are influencing change.
National MinimumWage and other worker entitlements
One day
Learn the wider implications of the National MinimumWage regulations to organisations, and the risks, when not compliant.
This course covers: ● Who is eligible to be paid the minimum wage, including the implications of recent worker status cases ● What pay and hours to include and what to exclude ● How to make the calculations ● How the processes vary for different types of work ● How to apply annual rate increases, including the implications of pay increases on pay structures
● How deductions can affect the calculations ● Interaction of the minimum wage with aspects of the Working Time Regulations ● Compliant record-keeping ● Penalties compliance and HMRC’s enforcement powers ● Tips on avoiding the most common errors
Book online at cipp.org.uk/training , email info@cipp.org.uk or call 0121 712 1000 for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
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Issue 49 | April 2019
| Professional in Payroll, Pensions and Reward |
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