New National Minimum Rates announced

Effective from April 2018, the Chancellor Philip Hammond confirmed in his Autumn budget, national minimum wage increases and a new scheme affecting care sector employers who may have underpaid their employees.

New National Minimum Wage Rates

In line with the intention for the national minimum wage to increase to £9 per hour from 2020, it will increase from £7.50 to £7.83, representing a 4.4 percent uplift.  In practical terms, this will mean a pay rise of around £600 per year for a full time worker.

The other rates will increase as follows:

  • Workers aged 21-24 from £7.05 to £7.38 per hour
  • Workers aged 18-20 from £5.60 to £5.90 per hour
  • Workers aged 16-17 from £4.05 to £4.20 per hour
  • Apprentice rate from £3.50 to £3.70 per hour

The Budget was also used to announce a review of the flexibility in the way organisations may use their apprenticeship levy (large companies have been required to pay this levy since April 2017 which they can then use to fund apprenticeships) and a National Retraining Scheme to support worker’s career development.

Care employers advised to correct minimum wage wage under payments

A new scheme to encourage companies in the care sector to make good any minimum wage underpayments was launched on 1st November 2017.

Recent employment tribunal judgements have shifted a focus onto a companies minimum wage obligations in the specific area of sleep-in shifts.  HMRC’s interpretation of the legislation, in common circumstances, requires that all hours of a sleep-in shift attract the minimum wage, regardless of whether the worker is asleep.

In order to soften the impact of these decisions on social care companies, the Social Care Compliance Scheme (SCCS) will see any underpayments corrected but remove the enforcement measures applied to companies that are found to have underpaid their workers. Employers have until the end of 2018 to join up to the scheme.

Committees publish draft bill on gig economy workers

A joint draft bill containing enhanced proctections for gig economy workers has been published by two government committees.

The propsal focuses on giving individuals more certainty about their status by providing an automatic assumption of “worker” status, meaning that it would be for the company to prove otherwise at employment tribunal.  This would also mean that these workers would be entitled to certain employment rights from day one.

Some recommendations from the Taylor Report are also included in the Bill, such as considerations of a higher national minimum wage rate for those on zero hour contracts. The government is yet to provide its full response to the review and this Bill will add more pressure on the government to take action.

If you need any help or guidance on the above, get in touch with HR Revolution.

Give us a call +44 203 538 5311 or email: hello@hrrevolution.co.uk or visit www.hrrevolution.co.uk  where our expert CIPD HR professionals are waiting to help you with any questions you may have.

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A version of this article first appeared on CIPD HR-inform.

Hung parliament – what does it mean for HR and employment law?

We have a new government of sorts, after all the campaigning, the Conservative party didn’t get enough votes to form a majority government meaning they will be forming a minority government in alliance with the Democratic Unionist Party.

The main priority for the Government will be Brexit negotiations but the following points will be good to keep an eye out for:

  • There will be lots of attention to those working the in the “gig economy” and the introduction of legislation to make clear their worker/employed status.
  • There could be limited changes to National Insurance payments – they could rise but this has not be stated clearly yet.
  • It is likely there will be an increase in the personal tax allowance to £12.5k and £50k for higher tax payers.

Things for businesses to look out for

Brexit negotiations around the rights to work, both for UK and EU nationals and EU workers currently in the UK, should be kept under careful review for any developments.

With increased attention on the “gig economy”, it may result in the re-assessment of contracts between businesses and self-employed workers and will also require greater analysis of the status of an employee, worker or contractor.

If you need any HR advice give us a call, we are here to help +203 538 5311 or email: info@hrrevolution.co.uk

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How will the political parties manifestos effect employment and HR?

Today, Thursday 8th June is the General Election 2017, where the people of the UK will head to the polls and elect a new government.

So what is each political party pledging around employment, talent and pensions? and which of the major parties’ policies will affect HR?

All the main parties have focused on employment matters and worker rights as fertile ground for winning votes – perhaps more than ever before.

Here’s our detailed round-up of who’s pledging what:

The Conservative party will:

  • Introduce a national retraining scheme. Under it the costs of training will be met by the government, with companies able to use the apprenticeship levy to support wage costs during the training period
  • Continue the campaign for fairer corporate governance. The party has stated that there will be new rules for takeovers and executive pay, with proposals around annual shareholder votes on pay packages and a requirement to publish pay ratios
  • Reduce the ‘triple lock’ on pensions to a ‘double lock’, with the state pension to rise by the higher of average earnings or inflation
  • Not increase VAT, but scrap a 2015 election pledge not to raise income tax or National Insurance
  • Make universities that are charging maximum tuition fees sponsor academies or help found free schools
  • Retain all workers’ rights currently guaranteed by EU law
  • Put worker representation on listed company boards
  • Introduce a statutory right to a year’s unpaid leave to care for a relative, and statutory leave for parents whose child has died.

The Labour party will:

  • Ban zero-hours contracts and unpaid internships
  • Raise the minimum wage to £10 by 2020 and scrap the public sector pay cap
  • Abolish university tuition fees
  • Offer an immediate guarantee about the status of EU nationals in the UK
  • Stop all planned increases to the state pension age after 66
  • Give all workers equal rights from day one, whether they’re part time or full time, temporary or permanent
  • Repeal the Trade Union Act and roll out sectoral collective bargaining
  • Guarantee trade unions a right to access workplaces
  • Abolish employment tribunal fees
  • Double paid paternity leave to four weeks and increase paternity pay
  • Strengthen protections against unfair redundancy for women
  • Create a million “good jobs” and rebalance the regions through setting up a National Investment Bank (which will leverage enough private finance to invest £250 billion in infrastructure over 10 years), a network of regional development banks, and a national transformation fund
  • Add four new public holidays per year.

The Liberal Democrats will:

  • Initiate a second EU referendum, with an option to remain in the EU
  • Expand Shared Parental Leave with an additional ‘use it or lose it’ month to encourage fathers to take time off with young children
  • Unilaterally guarantee the rights of EU nationals in the UK
  • Strengthen worker participation in decision-making, including staff representation on remuneration committees and the right for employees of a listed company to be represented on the board
  • Introduce a ‘good employer’ kitemark covering areas such as paying a living wage, avoiding unpaid internships, and using name-blind recruitment
  • Introduce a right for those on zero-hours contracts to request a fixed contract. The party would also consult on rights to request more regular working patterns
  • Aim to double the number of businesses hiring apprentices.

The Green Party will:

  • Phase in a four-day working week with a maximum of 35 hours
  • Scrap age-related wage bands and raise the national minimum wage to living wage levels for all
  • Take steps towards the introduction of a universal basic income
  • Introduce a ban on exploitative zero-hours contracts
  • Reduce the gap between the highest and lowest paid
  • Ensure a minimum 40% of all members of public company and public sector boards are women
  • Abolish the cap on National Insurance contributions so the wealthiest pay more
  • Provide free early education and childcare for all children, with formal education starting at age seven
  • Initiate a referendum on the detail of whatever deal is negotiated for Britain’s departure from the EU, with the option to reject the deal and remain in the EU
  • Immediately guarantee the rights of EU citizens to remain in the UK and urgently seek reciprocal arrangements for UK citizens living in the EU.

UKIP will:

  • Declare 23 June Independence Day, and make it a bank holiday
  • Introduce a flexible state pension window, so people can opt to retire earlier for a lower state pension or work longer for a slightly higher pension, as is the case at the moment
  • Bring forward legislation requiring employers to advertise jobs to British citizens before they offer them overseas.

The SNP will:

  • Devolve to allow Scotland to have its own policies after Brexit
  • Guarantee a living wage to all adults aged 18 and over
  • Lobby for the scrapping of the Skills Immigration Charge – a charge for employers of £1,000 per non-EEA worker per year
  • Call for the full reinstatement of the Post-Study Work Visa scheme, which allows foreign students to stay in the UK after graduation
  • Increase free childcare to 30 hours a week by 2020
  • Ensure companies engaging in blacklisting or ‘exploitative’ zero-hours contracts are barred from publicly-procured contracts
  • Incentivise oil and gas businesses to invest in renewables to protect jobs in the energy sector.

HR Revolution – www.hrrevolution.co.uk

A version of this article first appeared in HR Magazine

Key Employment law changes to look out for in April 2017

April is a busy time for HR Revolution and business owners alike. Not only are we required to tie up any loose ends from the previous financial year… We also need to make sure that we’re fully prepared for legislative changes that could impact on our and our client’s businesses.

This is a time when new rules come into force, so there’s no space right now for burying your head in the sand. You need to be prepared, and you need to take action.

Here’s what you need to know:

National wage is set to increase

On 1st April, the national minimum wage will increase from £6.95 to £7.05  For workers aged 25 and over, the national living wage rate will increase from £7.20 to £7.50.

As the rate varies according to age group, now is a great time to make sure that you’re compliant, and that payroll processes are in order.

Statutory redundancy pay will rise

New rules around redundancy pay will be rolled out from 6th April. If you have to make employees redundant, then you must pay those with two years’ service a sum based on their length of service, weekly pay, and age.

The weekly pay is subject to a maximum amount, and this will rise from £479 to £489.

Statutory maternity pay will rise

Statutory rates for maternity pay, paternity pay, shared parental pay, adoption pay will rise from £139.58 to £140.98 on 2nd April.

Statutory sick pay will rise

The rate of statutory sick pay is also increasing from £88.45 to £89.35. This increase is expected to occur on 6 April 2017.

To be entitled to these statutory payments, the employee’s average earnings must be equal to or more than the lower earnings limit.

The lower earnings limit is increasing from £112 to £113 in April 2017.  This is the first rise since the rates were frozen in April 2015.

Gender pay gap reporting comes into force

If you employ 250 or more employees, then this applies to you. You will be required to report on your gender pay gap, including any bonuses that you might use to reward your staff.

You’ll have a period of 12 months to publish this information on your own website, and upload the details to a government website. As such, you need to make sure that you have mechanisms in place to collect the necessary facts and figures.

Immigration skills charge will be introduced

Do you sponsor skilled workers under tier 2 of the immigration points-based system? If so, you will be required to pay a sponsorship levy of £1,000 per year for each certificate of sponsorship – or £364 if you’re a smaller business or charity.

There are certain exemptions that apply, so if your business hires skilled immigrants, it pays to seek out tailored advice.

Depending on the size of your business and other factors that may be at play, there are further changes that you need to be aware of. April is a fantastic time to carry out an audit of your policies and procedures, to make sure that you’re fulfilling your legal responsibilities.

With that in mind, pick up the phone and get in touch +44 203 538 5311 or email: info@hrrevolution.co.uk. We can arrange to have a discussion around the changes that you may need to implement in coming weeks, so you can move into the new financial year with the peace of mind that comes with knowing that everything is under control.

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Are you clear on your National Minimum Wage obligations?

Given the amount of press coverage recently about big companies being fined for failing to pay the minimum wage, if you are an employer it may be time to check your processes.

Argos has been forced to pay £2.4million to 37,000 current and former workers and also been fined £1.4million, after an investigation by HMRC.  Argos now owned by Sainsbury’s admitted that employees had not been paid for attending briefings before their shifts started and were also required to undergo security searches outside their working hours.  The government is now “naming and shaming” these companies and so far two big employers Sports Direct and Debenham’s have been found to be underpaying staff.

The National Minimum wage (NMW) is enforced by HMRC and most complaints are usually instigated by an employee or third party.  However, HMRC officers also have the power to carry out inspections at any time without providing a reason and can require employers to produce records and other information or access to determine the level of pay received by workers.

Under 25’s receive the NMW, which is currently £6.95 for 21 to 24 year-olds, and £5.55 for 18 to 20 year-olds.  The National Living Wage is for workers over the age of 25 and was introduced on 1 April 2016 and is currently £7.20 an hour rising to £7.50 in April.

The NMW is worked out at an hourly rate, but it applies to all eligible employees even if they’re not paid by the hour.  This means that however someone gets paid, they still need to work out their equivalent hourly rate to see if they’re getting the minimum wage.

There are different ways of checking that workers get the minimum wage depending on whether they are:

  • paid by the hour (known as ‘time work’)
  • paid an annual salary, under a contract for a basic number of hours each year (known as ‘salaried hours’)
  • paid by the piece – the number of things they make, or tasks they complete (known as ‘output work’)
  • paid in other ways (known as ‘unmeasured work’)

As an employer you must be wary that certain activities, even though they are not work as such, may still count as working time such as:

  • at work and required to be working, or on standby near the workplace (but don’t include rest breaks that are taken)
  • travelling in connection with work, including travelling from one work assignment to another
  • training or travelling to training

As an employer you need to be clear on your NMW obligations, if you have any questions or need guidance then let HR Revolution save you time and money, call + 44 203 538 5311 or email: info@hrrevolution.co.uk

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Key Employment Law changes to look out for in 2017

The saying is so true, there are few things in life you can guarantee but death, taxes and employment law changes are among them!!  So we’ve outlined 3 changes that will be coming this year, so make sure you get 2017 off to a flying start by being prepared.

Remember you need to be compliant and there are absolutely no excuses when it comes to employment law, let HR Revolution advise you.

Let’s take a look at the changes you need to pencil in your diary…

Gender pay gap reporting

For the first time, private sector, public sector, and voluntary sector employers with 250+ members of staff will be required to publish information relating to the gender pay gap, and how they are performing in terms of driving forward equality.

At the moment, the exact requirements are still being drafted, though it’s expected that the deadline for the first report will be 4th April 2018, based on data from 2016/2017. We’ll release more guidance on this once it’s available.

Changes to regulations surrounding employment of foreign workers

From April 2017, employers sponsoring foreign workers with a tier 2 visa will have to pay an immigration skills charge of £1,000 per worker. This will be reduced to £364 for small employers and charities.

In addition to this, the minimum annual salary threshold for ‘experienced workers’ applying for a tier 2 visa will be increased to £30,000. If you employ foreign workers, or plan to open up your recruitment channels in the near future? You need to make sure you’re compliant.

National minimum wage and living wage changes to be aligned

The dates for changes to national minimum wage and national minimum wage will be brought into alignment, so the good news here is that there are less dates to keep track of!

From April 2017, the national living wage for staff aged 25 or over will increase to £7.50 per hour.

All things considered, there’s plenty to think about in 2017, and plenty that you need to plan for. And of course, there’s the tricky issue of Brexit…

There’s still a grey area over what we should really expect, though things are likely to become clearer in the coming months. Make sure that you keep an eye on our updates for practical, no-nonsense guidance on what you really need to know.

Do you need help ensuring compliance? Give HR Revolution a call today: +44 203 538 5311 we’d love to help.

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National living wage set to rise to £7.50

Last week’s Autumn Statement from the Chancellor confirmed that the national living wage will rise to £7.50 per hour from April 2017.

The new rate will apply to workers aged 25 and over, and will mark the first rise in the new statutory minimum rate since it was introduced in April 2016, at £7.20.

In Philip Hammond’s first Autumn Statement as Chancellor and the first since Theresa May came to power as Prime Minister, he promised the Government would be committed to “fiscal discipline” and would make strategic investments to improve the UK’s productivity gap.

He said: “Raising productivity is essential to deliver the high-wage, high-skill economy we want.”

He pointed to the UK’s 30 percentage point lag behind Germany and the US, claiming this meant “in the real world, it takes a German worker four days to produce what we make in five; which means, in turn, that too many British workers work longer hours for lower pay than their counterparts”.

Regarding the job market, he described it as “robust”, pointing to predictions from the Office for Budget Responsibility (OBR) that the number of jobs would increase by 500,000 each year over the course of its five-year forecast. “Every UK nation and region saw a record number of people in work,” he said.

Other key announcements included:

  • The national insurance employer threshold and employee threshold will be aligned from April 2017, meaning that both employees and employers will start paying national insurance on weekly earnings above £157.
  • The personal allowance for tax will increase to £11,500 in April 2017, and will be £12,500 by the end of Parliament, with the threshold for higher-rate tax to be £50,000 by the end of the term.
  • From April 2017, those who access employee benefits will pay same tax as everyone else, although some salary-sacrifice schemes, such as childcare and cycle-to-work schemes, will be excluded.
  • The tax advantages of employee-shareholder status will be abolished after suggestions it has been misused by “high-earning individuals”.
  • New penalties will be introduced for those who enable use of tax avoidance schemes.
  • There will be a reduction in the rate at which benefits are withdrawn from people when they start work.

Hammond also pointed to the OBR’s predictions that the economy would grow at a rate of 2.1% in 2016 (compared with 2% predicted in March); 1.4% in 2017 (down from 2.2%); 1.7% in 2018 (down from 2.1%) and 2.1% in 2020 (same), with slow growth put down to Brexit-related uncertainty.

Many of today’s announcements were hinted at before the statement itself, with the Government claiming that Hammond’s proposals would “support ordinary working class families”, and that around three million households would benefit from changes to Universal Credit and higher wages.

However, shadow Chancellor John McDonnell called for the Government to offer a “real living wage” over and above the 30p rise announced.

Regarding the rise in the national living wage, TUC general-secretary Frances O’Grady said: “A raise to the national minimum wage for over-25s will help some low-paid workers. But the Government must also take the opportunity to boost the pay of hard-pressed nurses, teachers, firefighters and home helps, who face ten years of flatlining pay.”

The TUC believes working people will be around £1,000 worse off in 2020, if today’s predictions come to fruition.

The Chancellor also made the surprise announcement today that he would abolish the Autumn Statement itself, and that in future, there would be one main budget in the Autumn, with a “Spring Statement” that will respond to OBR forecasts.

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This article first appeared in Personnel Today on 23/11/16

 

HAPPY INDEPENDENCE DAY…

To all our American friends, happy 4th of July.

 

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The Living Wage Outrage!

So it’s been a little over a month since we saw the introduction of the National Living Wage but instead of praise for a better bank balance for employees,  there’s been a backlash of outrage against some “tight fisted” employers that have found a way around the legislation that has resulted in some actually being worse off… #livingwageoutrage

So how have they done this? Well, not that I want to name and shame but, let’s take the example being very poorly set by B&Q, they have made changes to employees contracts which take away additional “premium pay” for Sundays and Bank holidays, which used to be set at time and half and double time respectively.  The new contracts are getting rid of some long standing bonuses of around 6% AND those that don’t sign these new terms can have their employment terminated and lose any accrued bonus.  These changes now mean that some of their staff are out of pocket by hundreds or even thousands of pounds!  Would you sign up to that??

They, along with other companies guilty of removing premium pay packages, have said that they have made the changes to be fair across the board and that some employees will be better off under the new terms.  Unfortunately others will not and as one whistle-blower said “this is a kick in the teeth being loyal”.

Some other big name companies are clawing back the pennies by revoking perks previously offered to some staff to be able to give the increase to others, here are some examples:

EAT are taking away the 30 minute paid breaks, which sees some employees £936 worse off, however they have extended the £7.20 minimum wage to all staff regardless of age.

Zizzi have reduced their choice of free food for some employees resulting in a hit of £520 a year, but have said they now make discounted food available to all staff.

Café Nero have taken away a free panini, yes really a simple free panini, which sees their employees worse off by £364 over the year.

George Osborne has commented “this is not in the spirit of this law, this is not how it was intended.”  However, he must have seen it coming… it was predicted that to cover the extra wage bill, an additional £3 billion pounds a year would need to be found from somewhere and that in fact 60,000 jobs could be lost by 2020.

But while some giveth just to taketh away.   Aldi and Lidl have really stepped up and in fact increased their wage to £8.40ph for all staff, saying that the best way to maintain profitability and make these increases work, is to make every one of those hours for every employee as productive as possible, and I think that’s a great example to set.

Do you want to be an employer like Aldi or Lidl, but just don’t know how to boost productivity? Get in touch and let us see where we can help. #livingwageoutrage

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Thanks to ITV’s this morning: find their report here http://www.itv.com/thismorning/hot-topics/the-new-living-wage-outrage