Please find
below the new minimum wage rates from 1st April 2020.
Aged 25+
Aged 21 to 24
18 to 20
16 to 17
Apprentice
£8.72
£8.20
£6.45
£4.55
£4.15
As with all legislation governing payroll, compliance with the National Minimum Wage is the ultimate responsibility of the employer.
To help with these responsibilities, we currently undertake the following work:
Automatically increase hourly rates to meet the national minimum wage when they are increased in April each year;
Monitor when employees change age bands and increase the hourly rate to comply with minimum wage from the following pay period;
Monitor when 12 months has passed since the start of an apprenticeship (if this information is disclosed to us) to ensure the appropriate rate is being paid to any apprentices over 19 years old.
However, there are other areas that the employer alone will be aware of as part of employee management.
Training
If a worker is asked to do any training that is compulsory for the job, including Maths and English qualifications, then this would be classed as working time for NMW purposes. This would include any associated travelling.
If a worker is asked / requests to pay for a course themselves, this could reduce their earnings for National Minimum Wage purposes, depending on the circumstances.
Any training that is not compulsory for the job and is completed at the employees request rather than the employer can possibly be done in the workers own time, but it is advisable to confirm the arrangement in writing, signed by the employer and the employee in case of query.
Additional Hours
Employers do not have to pay employees for overtime, but if employees do unpaid work, their average pay for the total hours worked must not fall below the National Minimum Wage.
If an employer requires employees to turn up 5/10 minutes before work starts, this counts as working time.
Employees should not work more than an average of 48 hours per week unless they agree to this by completing a form to opt out of the Working time Directive.
Taking Time Off In Lieu
If an employee is close to the NMW rate and they ask to bank
time worked to take off at a later date, their earnings for their current pay
period may fall below National Minimum Wage.
Any time off in lieu should, where possible, occur in the same pay
period, but the following pay period at the very latest.
Apprentices
Time spent travelling from work to college during the
working day counts as working time as well as their time at college.
Uniform and Other Deductions
If
employees are not required to purchase specific clothes for work but have the
option to do so or are simply required to wear “smart” clothes this does not reduce
their pay for NMW purposes.
If
staff are required to wear cloths of a particular colour, e.g. black trousers,
this will be treated as a “uniform” for NMW purpose and may bring pay below NMW
rates. This is regardless of whether or
not the charge or the uniform is taken directly by the employer from wages or
the employees purchase the items themselves.
Where
the employee’s written contract requires the worker to make payment in specific
circumstances linked to the employees conduct (e.g. failure to return company
property such as uniform or equipment when employment ends) such deductions are
not treated as taking pay below national minimum wage.
Volunteers
Volunteers are exempt from National Minimum Wage
provided they do not receive any monetary payment, other than the reimbursement
of basic expenses, eg. travel, refreshments, or items needed for
work.
To establish whether they are a genuine
volunteer, some questions to ask are:
Do
they have to turn up?
Do
sanctions apply if they fail to do so (such as your grievance and disciplinary
policies)?
Please find below a link to the most recent guidance published by BEIS.
The National Minimum Wage rates are increasing from 1st April 2019.
Date
Aged 25+
Aged 21 to
24
18 to 20
16 to 17
Apprentice*
01-Apr-19
£8.21
£7.70
£6.15
£4.35
£3.90
As with all legislation governing payroll, compliance with the
National Minimum Wage is the ultimate responsibility of the employer.
To help employers with these responsibilities, Tandem Payroll Ltd undertakes the following work as part of the payroll service:
Automatically increase hourly rates to meet the national minimum wage when they are increased in April each year;
Monitor when employees change age bands and automatically increase the hourly rate to comply with minimum wage from the following pay period;
Monitor when 12 months have passed since the start of an apprenticeship to ensure the appropriate rate is being paid to any apprentices over 19 years old.
Undertake annual pay calculations for term-time employees where applicable.
Other areas of interest in respect of National Minimum Wages are as follows:
Training
If a worker is asked to do any training that is compulsory for the job, including Maths and English qualifications, then this would be classed as working time for NMW purposes. This would include any associated travelling.
If a worker is asked / requests to pay for a course themselves, this could reduce their earnings for National Minimum Wage purposes, depending on the circumstances.
It is possible that training that is not compulsory for the job and is completed at the employees request rather than the employer is counted as being done in the workers own time, but it is advisable to obtain advice first and always to confirm the arrangement in writing, signed by yourself and the employee.
Additional Hours
Employers
do not have to pay employees for overtime, but if employees do unpaid work,
their average pay for the total hours worked must not fall below the National Minimum Wage.
If
you require your employees to turn up 5/10 minutes before work starts, this
counts as working time. If it is entirely their choice whether to arrive
5/10 minutes early or not, and you cannot discipline them for not turning up
until their contract start time, then this 5/10 minutes is unlikely to be
working time.
Employees
should not work more than an average of 48 hours per week unless they agree to
this by completing a form to opt out of the Working time Directive.
Taking Time Off In Lieu
If an employee is close to the NMW rate and they ask to bank
time worked to take off at a later date, their earnings for their current pay
period may fall below National Minimum Wage.
Any time off in lieu should, where possible, occur in the same pay
period, but the following pay period at the very latest.
Apprentices
Time spent travelling from work to college during the
working day counts as working time as well as their time at college.
Uniform and Other Deductions
If
employees are not required to purchase specific clothes for work but have the
option to do so or are simply required to wear “smart” clothes this does not reduce
their pay for NMW purposes.
If
staff are required to wear cloths of a particular colour, e.g. black trousers,
this will be treated as a “uniform” for NMW purpose and may bring pay below NMW
rates. This is regardless of whether or
not the charge or the uniform is taken directly by the employer from wages or
the employees purchases the items themselves.
Where
the employee’s written contract permits deductions or requires the worker to make
payment in specific circumstances linked to the employees conduct (e.g. failure
to return company property such as uniform or equipment when employment ends)
such deductions are not treated as taking pay below national minimum wage.
Volunteers
Volunteers are exempt from National Minimum Wage
provided they do not receive any monetary payment, other than the reimbursement
of basic expenses, eg. travel, refreshments, or items needed for
work.
To establish whether they are a genuine
volunteer, some questions to ask are:
Do
they have to turn up?
Do
sanctions apply if they fail to do so (such as your grievance and disciplinary
policies)?
Below is a link to the most recent guidance update for you further information:
The new tax year is fast-approaching. Here are some of the changes you can expect from April 2019.
Change to Tax
Codes, Statutory Payments and other rates
The personal tax allowance is increasing to
£12,500 in April 2019.
Statutory
Payments
From April 2019
Statutory Sick Pay
£92.45 per week
Statutory Maternity Pay
£148.68 per week
Lower Earnings Limit for Statutory
Payments
£118 per week
Payslips
From April 2019 new legislation will come into
force requiring employers to (a) provide payslips to workers, and (b) show
hours where the pay varies by the amount of time worked. Where an employee has a fixed salary each
month and works variable overtime with additional pay at an hourly rate, only
the hours of overtime need to be shown.
It should be clear in which pay period all hours were worked.
Tandem Payroll gives a great deal of thought goes into ensuring the payslips we provide set out the various elements of pay clearly.
The first repayments begin for the new postgraduate loan from 6 April 2019. This is repaid concurrently with other undergraduate student loans (Plan 1 or Plan 2).
Holiday Pay
Legislation continues to develop around
holiday pay. At long last, the
Department for Business, Energy and Industrial Strategy (BEIS) has published
additional guidance on how to calculate holiday pay with examples.
This recommends the use of a 12-week average
for workers without fixed hours or pay rather than the 12.07% percentage of
hours worked previously set out by ACAS.
The current position with holiday pay is that the
4 weeks’ leave guaranteed under EU law must be based on “normal remuneration”. The principle is that the worker should be in
the same financial position as they would have been had they not taken the
leave.
This is to ensure that workers are not deterred from taking leave by being financially disadvantaged as a result. “Normal remuneration” is interpreted to include payments that are normally received, including any commission, bonuses, and overtime directly and intrinsically linked to the work that the worker is required to do.
Changes for the Future
Parental
Bereavement (Leave and Pay) Act 2018
This new law (given Royal Assent in September
2018) is not expected to be enforced on employers until April 2020.
It introduces a right for employed parents to
be absent from work for a minimum period of two weeks following the death of a
child. Eligibility criteria and various conditions will determine whether
parents are entitled to this leave and whether or not they are also entitled to
pay. In addition to leave and pay, parents taking bereavement leave will be
afforded employment protections similar to those associated with other forms of
family related leave.
Did you know?
An employee now has a right to a statement of employment particulars if they have worked continuously for at least a month. Previously they needed to be provided within 2 months of their employment start date. There is talk about changing this to a day one right of employment.
Under auto enrolment legislation, minimum pension contributions are required to increase over time. The next increase is due to take place from April 2019, as follows:
The Low Pay Commission (LPC) has published its 2016 Spring Report on the National Minimum Wage and the Government as accepted the recommendations, as follows:
Adult rate (21-24)
to increase from £6.70 to £6.95 (3.7%)
Youth Development Rate (18-20)
to increase from £5.30 to £5.55 (4.7%)
16-17 Year Old Rate
to increase from £3.87 to £4.00 (3.4%)
Apprentice Rate
to increase from £3.30 to £3.40 (3%)
The government has also confirmed that it will be aligning the cycle of the National Minimum Wage and the National Living Wage from April 2017. This means that the recommendations will last 6 months rather than the usual 12. There will be further recommendations in the Autumn on the level of all minimum wage rates (including the National Living Wage) from April 2017.
The Employment Allowance is increasing from £2000 to £3000 a year. To claim the allowance, the appropriate deductions need to be taken from the amount of Class 1 secondary National Insurance contributions payable to HMRC.
Class 1 National Insurance Contributions (NICs) for Apprentices under 25
If you employ an apprentice who is under the age of 25, who is working towards an apprenticeship in the UK which follows a government approved framework or standard, you may be eligible for zero-rate Class 1 National Insurance Contributions.
To apply, you must hold either a written agreement between yourselves, the apprentice and the training provider; or evidence of government funding for the apprenticeship. Any written agreement must give the government recognised apprentice framework or standard, and start and end dates for the apprenticeship.
National Living Wage
On 1 April 2016 the National Living Wage will become law when all staff aged 25 and over will be entitled to receive £7.20 per hour. This should take place in the relevant pay period on or after 1st April.
For example, if an employer’s monthly payroll period begins on 10 April 2016, the National Living Wage rate will apply from that date, because this is the first pay reference period that begins on or after 1 April 2016. The National Minimum Wage rate will apply for the period of 1 April to 9 April 2016.
The Department for Business, Innovation & Skills has published up to date guidance on zero hours contracts which includes what they are, how they affect employment rights and appropriate use and best practice.
This guidance provides further information on zero hours contracts and how they should be used. It explains what they are and includes information on:
• employment rights
• appropriate use
• inappropriate use
• alternatives
• best practice
• exclusivity clauses.
