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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Employers’ bizarre excuses for failing to pay minimum wage

I find this unbelievable in 2017!  Please make sure you are not an employer to be accused of this and keep on top of Employment law in your workplace.

One boss failed to pay the minimum wage to a worker because “she only makes the teas” and that is just one of a string of bizarre excuses by employers.

Another argued their case for not paying the legal minimum, saying that a member of staff “wasn’t a good worker”, while one said employees should “prove their worth”.

These excuses, heard by HM Revenue and Customs (HMRC), were published as part of a government awareness campaign.

It is encouraging people to check their wages and warning employers of fines.

Business Minister Margot James said: “There are no excuses for underpaying staff what they are legally entitled to”.

“This campaign will raise awareness among the lowest paid in society about what they must legally receive and I would encourage anyone who thinks they may be paid less to contact Acas as soon as possible.”

All workers must be paid at least £7.20 an hour if they are aged 25 and over, in order to comply with the National Living Wage.

The National Minimum Wage means that:

  • Workers aged 21 to 24 should receive a legal minimum of £6.95 an hour
  • Staff aged 18 to 20 should get at least £5.55 an hour
  • Pay should be at least £4 an hour for the under-18s
  • Apprentices should receive a minimum of £3.40 an hour

Among the cases investigated by HMRC was a boss who thought it was acceptable to pay foreign staff below the statutory rate.

I also heard from one employer who said: “She doesn’t deserve the national minimum wage because she only makes the teas and sweeps the floors.”

Another said: “My accountant and I speak a different language – he doesn’t understand me and that’s why he doesn’t pay my workers the correct wages.”

Len McCluskey, general secretary of the Unite union, said: “Too often, companies are skimming their profits out of the pockets of their workforce. It is a continuing reminder that, for too many working people, work in this country just does not pay.

“While it is good to see the rogues being held to account in some way, the fines can only ever be a rap on the knuckles.”

Stewart Gee, of the conciliation service Acas, said: “We welcome this new government awareness campaign, as there are no good excuses for not paying staff what they are legally entitled to.

“Employers are breaking the law if they do not pay the national minimum wage and businesses face a maximum fine of £20,000 per worker for not paying the national living wage. Failure to pay the national living wage could also result in a company director being banned for up to 15 years.”

If this article has highlighted any issues, please do get in touch HR Revolution would love to help, call us now +44 203 538 5311 or email@ info@hrrevolution.co.uk

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A version of this article first appeared on http://www.bbc.co.uk

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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4 things you need to do to prepare for the National Living Wage…

As part of the Governments vision of a “higher wage, lower welfare, lower tax society”, on the 1st April 2016, the National Living Wage becomes law.

This means that ALL workers in the UK aged over 25, and not in the first year of an apprenticeship, are entitled to an extra 50p per hour that sees their wage increase to £7.20 per hour. This is said to have a direct benefit to more than a million people in this bracket, and could see pay packets rise by up to £900 a year.

As an employer from 1st April 2016, you will need to make sure that you are paying your employees correctly and the National Living Wage will be enforced as strongly as the current National Minimum Wage.

Taking into consideration the following 4 steps will help you be ready for this change:

  1. Check who within your business is eligible. If you are in any doubt and need more information please click HERE for the government’s employment status page.
  2. Make sure your payroll department is aware, for useful guidance on HMRC tutorials please click HERE.
  3. Communicate with ALL your employees and make sure they know about their new pay rate.
  4. Make sure that your employees under the age of 25 are earning the correct rate of National Minimum wage, for the correct government rates please click HERE.

It is vital to remember that there are other things to consider.  In HRRevs recent blogs, we have highlighted how some of the big companies have been caught out by not paying the minimum wage, as they had not taken into account certain things.

Outlined below are some payments that must be taken into consideration when calculating the minimum wage:

  • Income tax and National insurance contributions
  • Wage advances or loans
  • Repayment of overpaid wages
  • Items that workers have paid for that are not needed for the job or paid for voluntarily, e.g. meals
  • Accommodation provided by an employer above the offset rate (£5.35 a day or £37.45 a week)
  • Penalty charges for an employee’s misconduct

Here is an example that the government use to help explain it better:

John is 27 and works a 40 hour week.  He earns £6.80 per hour or £272 per week.

He pays £15 a week to rent his uniform and the money is not refunded.  He also chooses to eat in the canteen and pays £20 per week for his meals.

To calculate his minimum wage, John’s employer must deduct the uniform rental from the pay but not the money paid for meals.

This means John makes £257 per week (£272 minus £15) which is £6.43 per hour.  This is below the minimum wage rate of £6.70

It is also important to note that employers who deliberately fail to pay the national living wage to qualifying staff face fines of 200% of arrears owed up to a maximum of £20,000 per each underpaid employee, although this will be halved if paid within 14 days. They may also face criminal charges, so it is critical that companies get it right.”

If any of your employees are not over 25 and do not qualify for the National Living wage, please see below the rates that still apply.

Year 21 and over 18 to 20 Under 18 Apprentice
2016* £6.70 £5.30 £3.87 £3.30

* next wage rates update in October 2016

Download our FREE guide to Payroll, PAYE and Tax in the UK HERE or get in touch and talk to one of our HR Consultants today to see how we can help!