Archive RSS
Blog  »  Wages
8
Jan 20

Posted by
Debbie Clarke

Minimum Wage Rates Increase from 1st April 2020

It has been announced that on the 1st April 2020 the minimum wage will increase by amounts ranging from 4.6% to 6.5%. The National Minimum Wage (NMW) is the minimum pay per hour that most employees are entitled to by law. An employee's age and if they are an apprentice will determine the rate they will receive.

These rates were recommended to the government by the Low Pay Commission, an independent body that advise on the national minimum wage and living wage. It is estimated that approximately three million workers will see pay increases due to the new rates being introduced. Employees aged 25 and over will see a rise of 51p from £8.21 to £8.72, which will result in an increase of £930 annually.

Please see the current rates and the new rates below:

  Rates from 1 April 2019 are Rates from 1 April 2020 will be
25 yrs old and over £8.21 per hour £8.72 per hour
21-24 yrs old £7.70 per hour £8.20 per hour
18-20 yrs old £6.15 per hour £6.45 per hour
16-17 yrs old £4.35 per hour £4.55 per hour
Apprentices under 19 or 19 or over who
are in the first year of apprenticeship
£3.90 per hour £4.15 per hour


It has also been recommended by the Low Pay Commission that the national living wage will be paid to employees aged 21 and over. The National Living Wage is an obligatory minimum wage currently paid to employees aged 25 and over that was introduced in April 2016. The government aims to achieve this recommendation by 2024.

Posted in Wages

13
Dec 17

Posted by
Lauren Conway

Christmas Bank Holiday Entitlements

There are three public holidays coming over the festive season – Christmas Day, Boxing Day and New Year’s Day. Although many offices across the country will close during this period it can be one of the busiest times of the year for industries including retail, hospitality, and hair and beauty. So what public holiday entitlement are employees entitled to over this time?

Bank holiday entitlement

Employers do not have to give employees paid leave on bank holidays. Any right to time off, payment for time off or extra pay for bank holidays worked depends on the terms of the employee's contract of employment. Therefore employees may be required to work on bank holidays. Employers may choose to include bank holidays as part of a worker’s statutory annual leave.

Holiday leave entitlement

Employees’ holiday rights start on the first day of their employment.

Under the Working Time Regulations 1998, workers (including most agency and freelance workers) have the right to:

• 5.6 Weeks’ paid leave each year, this equates to 28 days for full-time employees

Part-time employees

Part-time employees are entitled to the same holidays as full-time workers, calculated on a pro-rata basis. For example:

• 5.6 x 5 working days = 28 days
• 5.6 x 4 working days = 22.4 days
• 5.6 x 3 working days = 16.8 days

Irregular hours

Annual leave for irregular workers is best calculated as a percentage using 12.07% of days worked.

Limits on statutory leave

Statutory leave is capped at 28 days per year. If an employee works 6 days per week their statutory entitlement is 28 days, not 33.6 (6 multiply by 5.6)

To book a free online demo of Bright Contracts click here
To download your free trial of Bright Contracts click here

Posted in Contract of employment, Pay/Wage, Wages

25
Sep 17

Posted by
Jennie Hussey

National Minimum Wage (NMW) in the news again

A junior minister has revealed that shortfalls in national minimum wage (NMW) payments hit a record £10.9m in 2016, affecting up to 100,000 employees.

Some of the country’s well-known retailers were caught out by failing to pay staff correct wage rates, including John Lewis & Tesco. Tesco stated that it had paid their staff less than the NMW when a new payroll system was introduced, leaving 140,000 of its employee’s being short-changed nearly £10m between them. John Lewis also blamed a payroll error when it was discovered they had breached the NMW laws to the tune of £36m.

Charles Cotton, performance and reward advisor at the CIPD said there were various reasons for shortfalls in payments from employers – “…employers may be ignoring the law and exploiting their workers…another is that the employer doesn’t fully understand the legal requirements…so it is important that employers are aware of the rules.”

This is not the first time NMW underpayments have been brought to light this year, we recently posted a blog on the government's name and shame scheme where 233 employers had to pay back £2m to underpaid workers. And also the release of a recent survey by the Dept. for Business, Energy and Industrial Strategy (BEIS) indicated that 1 in 5 apprentices have not been receiving the mandatory minimum wage. The survey discovered that the number of apprentices receiving less than the NMW they are entitled to rose sharply from 13% for those aged 16-18 to 32% for those aged 19-20.

Underpayments occurring since April 2016 have been subject to a penalty of 200% of the value of the underpaid amount – capped at £20,000 but this does not seem to have had the desired effect of discouraging employers from breaching the rules.

It is extremely important that organisations pay the wage rates that they are legally obliged to. Employers that are found to be deliberately flouting the law should also be prosecuted, so that good companies aren’t undermined by bad ones.

 

To book a free online demo of Bright Contracts click here
To download your free trial of Bright Contracts click here

Posted in Company handbook, Contract of employment, Employee Contracts, Employee Handbook, Employee Records, Employment Contract, Pay/Wage, Staff Handbook, Wages

23
Aug 17

Posted by
Lauren Conway

233 employers to pay back £2 million to underpaid workers

233 employers have been ordered to pay back almost £2 million to 13,000 of the UK’s lowest paid workers, as part of the Government’s scheme to name and shame employers who fail to pay the National Minimum Wage and Living Wage.

A list that identifies these employers has been published by The Department for Business, Energy and Industrial Strategy. As well as paying back the money owed, employers on the list have also been fined £1.9 million by the Government.

The sectors that featured frequently on the list included:

Hair and Beauty: approximately 60 employers, in arrears of £121,000 for circa 200 workers
Hospitality: approximately 50 employers, in arrears of £77,000 for circa 220 workers
Retail: approximately 20 employers, in arrears of £1.5m for circa 12,200 workers

Employers in this round fell short by failing to pay workers overtime hours, deducting money from wages to pay for uniforms and wrongfully paying apprentice rates to workers.

Business Minister Margot James said:

“It is against the law to pay workers less than legal minimum wage rates, short-changing ordinary working people and undercutting honest employers. Today’s naming round identifies a record £2 million of back pay for workers and sends the clear message to employers that the government will come down hard on those who break the law.”

This is the 12th round of Government naming and shaming with so far £6 million recovered for 40,000 workers with 1,200 employers being fined £4 million. Employers need to be aware of the National Minimum and National Wage and Apprentice rates. Employers who fail to comply with these rates could face substantial fines and risk their business being named and shamed. To view the current rates click here.

To view the full list click here.

BrightPay - Payroll and Auto Enrolment Software

Bright Contracts - Employment Contracts and Handbooks

Posted in Company handbook, Contract of employment, Employee Contracts, Employee Handbook, Employment Contract, Employment Update, Pay/Wage, Staff Handbook, Wages

9
Aug 17

Posted by
Lauren Conway

Employers must now include voluntary overtime when calculating holiday pay

A landmark legal victory for Unite union means that employers must now include normal voluntary overtime when they are calculating holiday pay. The ruling is of major significance to workers who receive payments for working voluntary overtime but these payments are not reflected in their holiday pay. The union says that the ruling has set a legally binding precedent which employment tribunals across the UK are obliged to follow.

The Case

The case against Dudley Metropolitan Borough Council was brought by 56 council employees who worked on maintaining Dudley’s housing stock as electricians, carpenters, and plumbers. The employees worked regular voluntary overtime, beyond their fixed contractual hours, including Saturdays and they also elected to go on a standby rota every four weeks, to deal with emergency call-outs and repairs. The loss of earnings from holiday pay underpayments varied between £350 and £1,500 a year depending on each worker and how much voluntary overtime they carried out.
The decision by the employment appeal tribunal is the first to confirm that payments for entirely voluntary duties, such as voluntary overtime, standby, call-out work and travel-time linked to that work, should be included in the calculation of workers holiday pay.

Learning Points for Employers

The area of whether overtime should be included in employees holiday pay is a hot topic. This ruling echoes that of Fulton & Baxter v Bear Scotland Ltd when the ET found that overtime and other payments should have been included in the calculation of holiday pay.

Employers who do not pay employees normal voluntary overtime as part of their holiday pay are urged to reconsider this and make a change otherwise they might see themselves in hot water if a case were brought against them.

BrightPay - Payroll and Auto Enrolment Software
Bright Contracts - Employment Contracts and Handbooks

Posted in Annual Leave, Company handbook, Contract of employment, Employee Contracts, Employee Handbook, Employment Contract, Employment Tribunals, Employment Update, Pay/Wage, Staff Handbook, Wages

29
Jun 17

Posted by
Lauren Conway

Should holiday pay include overtime and commission?

With the unusually high temperatures we have gotten recently in Britain we can agree that summer is officially here. While that is great news for most, especially for employees packing their bags and getting ready for their summer holidays, it leaves employers with the headache of calculating annual leave entitlements. The areas of whether holiday pay should include commission and overtime have been hot topics of late.

Lock v British Gas Trading Ltd

Mr. Lock claimed that British Gas had calculated his holiday pay incorrectly by not including a commission element. Mr. Lock was employed by British Gas as a sales consultant and receives a basic salary plus commission based on the sales he achieves. During a period of annual leave, Lock saw his income was reduced as he was paid only his basic salary and not commission as he was not making sales during his holiday. The Employment Tribunal found that Mr. Lock’s holiday pay should include an amount to reflect the commission that he would have otherwise earned had he not taken annual leave. They found that by penalizing an employee’s holiday pay might discourage them from taking annual leave for the fact that they would not be able to make sales and earn commission during that period.

Fulton & Baxter v Bear Scotland Ltd

Fulton and Baxter (the claimants) claimed that Bear Scotland Ltd (the respondent) made unauthorized deductions from their wages when overtime and other payments had not been included in the calculation of their annual leave pay. The ET found that by omitting these additional payments from its annual leave calculations, the respondent had indeed made unauthorized deductions from the claimant’s wages.

Learning Points

These recent rulings indicate a new perspective on what is deemed to be fair in relation to the calculation of leave entitlements. In light of these cases, employers across the board are reviewing how they calculate holiday pay. The current position is that, if there is a fundamental link between commission received and the performance of tasks, the commission should be included in the calculation of holiday pay. Therefore, where an employee would have earned commission during the leave period had they worked, it should be included when calculating holiday pay.

BrightPay - Payroll and Auto Enrolment Software
Bright Contracts - Employment Contracts and Handbooks

Posted in Annual Leave, Company handbook, Contract of employment, Employee Contracts, Employee Handbook, Pay/Wage, Wages

BrightPay

The new standard in payroll software, now available for employers in the UK and Ireland.

UK Website  Ireland Website

Bright Contracts

Create tailored professional employment contracts and staff handbooks. Available for employers in the UK and Ireland.

UK Website  Ireland Website