National Minimum Wage Increase April 2019

Published on Thursday 14 March 2019

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:

  1. Automatically increase hourly rates to meet the national minimum wage when they are increased in April each year;
  2. Monitor when employees change age bands and automatically increase the hourly rate to comply with minimum wage from the following pay period;
  3. 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.
  4. Undertake annual pay calculations for term-time employees where applicable. 

Other areas of interest in respect of National Minimum Wages are as follows:

Training

  1. 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.
  2. 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.
  3. 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

  1. 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.     
  2. 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. 
  3. 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

  1. 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.
  2. 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.
  3. 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

  1. 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. 
  2. To establish whether they are a genuine volunteer, some questions to ask are:
    1. Do they have to turn up?
    1. 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:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/769078/calculating-minimum-wage-update-december-2018.pdf


Increases to Pension Contributions April 2019

Published on Sunday 3 March 2019

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:

Employer Contributions 3%

Employee Contributions 5% (includes 1% tax relief)

You are able to find out more information about this and your general ongoing duties in the link below:

https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/declare-your-compliance/ongoing-duties-for-employers-


National Minimum Wage Increase April 2017

Published on Friday 3 March 2017

National Minimum Wage and National Living Wage rates are increasing with effect from 1st April 2017 as follows:

 

25 and over 21 and over 18 to 20 16 to 17 Apprentice under 19 or 19 or over in their 1st year
£7.50 £7.05 £5.60 £4.05 £3.50

National Minimum Wage Rates October 2016

Published on Monday 28 March 2016

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.


April 2016 Payroll Update

Published on Monday 28 March 2016

Employment Allowance

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.


Zero Hour Contracts and Relief Workers

Published on Saturday 31 October 2015

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.

Please find below a link to see this guidance

https://www.gov.uk/government/publications/zero-hours-contracts-guidance-for-employers/zero-hours-contracts-guidance-for-employers

 

31 October 2015