BEIS and HMRC held a Joint National Minimum Wage (NMW) virtual Stakeholder Forum on 29th April 2021 with employer and Minimum pay industry experts.
They have kindly shared the presentation slides from the day.
The government department responsible for employment law including National Minimum Wage is the Department for Business Energy and Industrial Strategy (BEIS). The current enforcer of National Minimum Wage law is HM Revenue and Customs (HMRC).
As part of the Matthew Taylor review of modern working practices, a new single enforcer is proposed to be introduced to enforce certain employment rights including National Minimum Wage and Holiday Pay rights under the Working Time Directive and Employment Rights Act.
The session was undertaken virtually across a team conference, it was well organised with a number of specialist presentations and question and answers groups.
Topics discussed included:
- NMW/NLW uprating and age change
- 1st March 2021 New guidance format
- 19th March 2021 Sleep-in ruling
- Uber judgement
- Single enforcement body
- Enforcement through COVID
- ‘Our Promote activity’
- Salaried hours
- Payment cycles
- Calculation year
- When do the changes take effect
- Salary Sacrifice and deductions
- Savings schemes – ‘use and benefit’
- Ministerial direction
Minimum Pay law is complex. To ensure compliance employers need to ensure accurate recording of hours considered for work, along with relevant earnings.
Not all pay counts towards minimum pay. For example, shift and overtime premia are not earnings fir minimum pay purposes.
Often employer believe minimum pay is about the hourly rate they pay. However, it is based on relevant earnings, minus any reduction amounts required divided by actual worked time to then determine what rate was actually received.
Some areas of minimum pay law do not seem logical! Why does holiday pay not cover salary sacrifice and deductions. What if flex allowances are provided to allow selection of salary sacrifice or even deductions. Why can employees not use their shift and overtime premia in the calculation of minimum wage when they receive alternate benefits or employer pension enhancements.
Employers beware. The trips and traps can result n an employer inadvertently breaching minimum wage law. This can then result in fines and the naming and shaming on published lists.
Can PAYadvice help?
PAYadvice can help employers in understanding and complying with minimum pay law.
A review of employer practice can assess whether there are business and employment practices that may cause minimum pay concern.
Assistance can be given on calculation of minimum pay as well as review of salary sacrifice arrangements deductions and other considerations.