The report states that employers should be incentivised to provide certainty of hours and income as far as possible, and to think carefully about how much flexibility they can reasonably expect from their workers. Workers need to be able to make informed decisions about the work that they do, to plan around it, and to be compensated if arrangements change at short notice. The report acknowledges that there is undoubtedly an important role for flexibility in the labour market, but believes that too many employers and businesses are relying on zero hours, short-hours or agency contracts, when they could be more forward thinking in their scheduling. So the recommendation is that government must take steps to ensure that flexibility does not benefit the employer, at the unreasonable expense of the worker, and that flexibility is genuinely a mutually beneficial arrangement - government should ask the Low Pay Commission in its next remit, to advise on the impact of bringing in a higher National Minimum Wage for hours which are not guaranteed in a contract. This new higher rate should be set at a level which incentivises employers to schedule guaranteed hours as far as reasonable within their business. Businesses would still have the ability to offer zero or short-hours contracts, or to request that an individual works longer hours than those guaranteed in their contract, but would have to compensate the most vulnerable workers (those on low wages) for the additional flexibility demanded of them. For example, if an individual is on a contract which only guaranteed them 6 hours a week, but is regularly asked to work more than this, they should be entitled to the standard National Minimum or National Living Wage rate for the first 6 hours they worked in a week, and then this new higher rate for any hours beyond that. Following the current regime for calculating the minimum wage, an employer could average hours and pay out over a pay reference period. This would still give employers (particularly those using longer pay reference periods) a level of flexibility to respond to changing demand, but would give individuals more certainty over the pay they are likely to receive in a given period. It would also compensate them more fairly where they are asked to work additional shifts. The LPC will need to consider the rate at which such a premium should be set and the potential impact on marginal hours of employment. It should also consider any potential impact on NMW compliance from a more complicated system. Government should also consider other ways in which employers might be encouraged to guarantee more hours to their staff, including the role of voluntary collective agreements.
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National minimum wage and sleeping time 28 July 2017
The government has announced that it will waive the financial penalties faced by employers who are found to have underpaid their workers for “sleep-in” shifts.
HMRC published a statement on 26 July 2017 regarding their current investigations into social care providers for underpayment of “sleep-in” shifts.
At the Spring Budget the government announced that it was providing an additional £2bn to councils in England for social care, including £1bn this year. Furthermore, the government has announced a set of further, exceptional measures to support the social care sector. The government recognises that the cumulative financial liability of penalties and arrears of wages could pose significant challenges to the social care sector. In extreme circumstances, providers may be unable to meet their obligations to repay their workers. Consequently the government will waive the financial penalties faced by employers who are found to have underpaid their workers for “sleep-in” shifts. These penalties are levied by HMRC and do not affect the arrears of wages to be received by workers in cases of underpayment of the National Minimum Wage. The government recognises that written guidance published before February 2015 was potentially misleading. The waiver is to apply to any arrears of pay resulting from “sleep-in” shifts that took place before 26 July 2017. Any employer underpaying their staff for these shifts in the future will be liable to pay financial penalties, in the usual way, of 200% of the arrears found. The government will continue to work with representatives of the social care sector to see how it might be possible to minimise any impact on provision of social care as a result of this situation. To allow this work to take place before deadlines of arrears of wages are enforced, the government will adopt a policy of temporarily suspending enforcement activity of “sleep-in” shifts. This suspension will apply until 2 October 2017. It will apply to HMRC investigations where there may be an underpayment in respect of “sleep-in” shifts, and applies to employers in the social care sector only.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
Page 287 of 516
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