There are two sets of amendments – one which serves solely to increase the NMW rates to bring them in line with recommendations made by the Low Pay Commission (LPC), which were confirmed back in December 2019 as being effective from 1 April 2020. The second set of regulations make certain technical amendments to how NMW is calculated. The changes mirror some of those explained within the response to the consultation ‘Salaried workers and salary sacrifice schemes: changing the National Minimum Wage rules’. The consultation was published by the Department for Business, Energy and Industrial Strategy (BEIS), and ran from 17 December 2018 to 1 March 2019. It sought views on proposed changes to NMW regulations which related specifically to salaried hours work, and where employers felt that NMW rules unfairly penalised them with no clear benefit or protection for workers. It also requested feedback on the practical operation of salary sacrifice schemes. The key changes within the legislation are the removal of “salary premiums” from the calculation of annual salary pay or basic hours. Additionally, employers now have the option to change a calculation year for salaried workers, if they give at least three months’ written notice to affected workers, and providing that certain circumstances are met. The amendments also mean that, where a reduction in pay has been made to comply with a requirement imposed by the employer then this will not be classed as a reduction to a worker’s remuneration for the purpose of calculating the rate at which a worker has been paid, as long as the employer intends to, or already has, reimbursed the worker for that purchase. The same arrangement applies in terms of deductions and payments relating to a worker’s expenditure that is connected to their employment.
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CIPP Survey: 2020 LPC annual review of minimum wage rates 21 April 2020
To support the CIPP’s written response to the LPC’s 2020 consultation on what the National Living Wage (NLW) and National Minimum Wage (NMW) rates should be from April 2021, the Policy team have designed a survey. The survey aims to collect evidence which will assist in informing the LPC’s recommendations for the 2021 NMW rates.
Respondents will be asked for their views and opinions as to
• The impact of increases in the NLW since its introduction, including the April 2020 uprating • The affordability and effects of a NLW rate of £9.21 from April 2021 • 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. The current central projection for the NLW rate from April 2024 is £10.69 • Potential changes to the Apprentice Rate and the effect this would have, with particular focus on younger apprentices, aged between 16 and 18 years old • Which broader economic issues have affected the perception of what NLW and NMW rates should be • The compliance and enforcement of NLW / NMW The CIPP wholeheartedly understands that payroll professionals are extremely busy individuals, and that measures recently introduced to help support the UK through the outbreak of coronavirus will be demanding a substantial amount of, if not all, of their time. The survey should take approximately 16 minutes to complete, and the CIPP would really appreciate the feedback of anybody with an interest in this matter, so if you could spare the time, it would be much appreciated. In responding to this survey, you will be helping to shape the future of minimum wage rates that employers must pay their employees, and will be assisting the LPC through what will potentially be their toughest research year since the minimum wage was introduced 21 years ago, due to the current circumstances relating to coronavirus. The more views the CIPP has to include in its written statement, the more accurate picture we can build.
The survey closes at 23:45 on Friday 22 May 2020, so don’t miss the opportunity to have your say.
Thank you in advance for your time.
CIPP comment
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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