COMPLIANCE
living wage, as the calculations behind that will differ slightly to those the LPC will be using. From April 2025, the LPC is aiming to close the gap between the 18-20-year-old banding and the national living wage (NLW) rate. We predict this will be similar to what we saw in April 2024 with the abolition of the 21-22-year-old banding, which meant the NLW would become applicable to all workers aged 21 and above. The removal of that banding has seen a tightening of pay scales, meaning those workers being paid comfortably above the NMW may find themselves now in receipt of the NLW only. There’s also an ongoing conversation regarding salary sacrifice arrangements for employee benefits, such as pension contributions and electric vehicles. A topic the panellists discussed which will impact employers that take on younger workers (for example, in the hospitality, retail and childcare sectors) is the Private Members Bill which will extend automatic enrolment to workers from the age of 18. An increase in pay, in the form of entitlement to the NLW and the promise of a pension contribution from an employer, can only be a good news story for workers. However, employers will see increased staff costs with no financial support from government. This is something the CIPP’s policy team will be keeping high on its agenda and will take into discussions with all relevant stakeholders including the LPC, the DBT and the Department for Work and Pensions (DWP). Exploitative zero-hour contracts Panellists discussed the advantages of zero- hours contracts, which offer the benefit of flexibility for working parents and students. Some workforces rely on their employees being able to take a shift at late notice and if the plans were to remove zero-hour contracts completely, this could have caused issues for certain employers. The panel agreed that contracts which are enforced as zero-hours shouldn’t be allowed, and the CIPP believes that this is what is meant by ‘exploitative’. However, we’re still awaiting a formal explanation of what exploitative means, and hopefully this will be covered in the Employment Rights Bill. More information about the newly released Employment Rights Bill can be found on page 38. Knowing that removing zero-hour contracts completely isn’t on the agenda (although this has created better news stories), but rather that the plan is to make it mandatory for
employers to offer a contract which reflects an individual’s 12-week working pattern seems more sensical. If, however, the worker chooses not to take up that contract, that’s also fine and they can remain on their zero- hour contract, putting the decision firmly back into the worker’s hands. Something that will be difficult to implement and practise will be paying workers for cancelled or curtailed shifts. Again, we hope the Employment Rights Bill will provide more insight into how this will work in practice. Reforms to statutory sick pay (SSP) Labour made a manifesto pledge to change SSP to ensure it’s paid from day one of sickness and to make it available to lower paid workers by removing the lower earnings limit. A consultation was launched to delve into how this would work in practice, which can be found here: https://ow.ly/ tASe50TWvIZ. The CIPP’s policy team gave evidence to the Work and Pensions Committee in the House of Commons in January of this year on this very topic. We have been working on this since and will continue to do so to ensure any changes to SSP are rolled out smoothly. We’re currently assisting the DWP and Department of Health and Social Care Joint Work and Health Directorate on their plans to strengthen SSP as they move forward with key policy decisions in this space. The panel discussed how some employers may not pay the first three days of sickness under their occupational sick pay policy to follow the SSP rules, so those employers may wish to change their occupational policies to realign with SSP. One of the things the CIPP pushed for in the House of Commons, and in our written call for evidence response, was for the government to reintroduce employer funding by reimbursing the cost of SSP up to 103% for small and medium-sized enterprises. This would support smaller employers and the employees who work for them while limiting the cost to the Treasury, as it wouldn’t need to reimburse larger employers who could afford to pay their share. Reimbursement hasn’t been mentioned in Labour’s manifesto pledges, but let’s see what the future brings. Hours worked via RTI technical consultation We still haven’t had a formal response
from HM Revenue and Customs (HMRC) regarding the technical consultation, but we have had a formal update informing us that the RTI element of the consultation has been pushed back to the earliest of April 2026. This is a welcome announcement for the industry, especially for those working in a bureau environment, where data collection changes will be required to ensure the data needed is being captured from clients and sent onto their agents. Software developers on the panel expressed their relief at the additional time they have, especially with several other reporting amendments coming through, such as post codes for freeport and investment zones. The policy team was privileged to review new draft regulations following the feedback provided in the consultation responses HMRC received before they were provided to ministers. We aren’t allowed to disclose what those regulations look like, but what we can say is that they’ve reduced the administrative burden on the profession. Mandating payrolling benefits due April 2026 HMRC has been quiet on this topic following the initial announcement earlier this year. HMRC representatives did confirm at our Annual Conference and Exhibition that this is still going ahead, but didn’t confirm in what format. Panellists discussed the administrative burden this could have on the payroll function, in terms of the transfer of information from other business areas that hold information on the benefits employees receive (for example, company car information from the fleet management team). This burden will be heightened for bureaux, where the data transfer will be from clients and their business areas, rather than coming from an internal source. Software representatives stated they would want a lead time of 18 months to amend software reporting requirements, which means we need to have had that information by now! n How can members get involved in the technical panel? The CIPP is keen to hear questions and topics that members would like to see debated and discussed with the technical panel. If you have anything you’d like to ask, please email the policy team, at policy@cipp.org.uk to get your issues on the agenda.
30
| Professional in Payroll, Pensions and Reward |
Issue 106 | December 2024 - January 2025
Made with FlippingBook - Online magazine maker