Minumum wage increase query

Minumum wage increase query

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As per the description, cleaning company client has historically paid staff fortnightly, one week in arrears.  Staff were on £6.20 per hour.

The new NMW of £6.31 came in on 1 October.  We have to prepare the payroll to be paid out this coming Friday for hours worked to 29 September.  Can the client pay this pay period at £6.20 as previously as the hours worked that are being paid were before the NMW increase, or does it have to be at the new rate as the payday come after the increase?

Thanks in advance

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By Kazmc
03rd Oct 2013 08:58

I have had different..........

I have been given different information in the past regarding this issue. We have a payroll that pays on the 15th of the month which relates to work done in the previous months period. Ie payment on the 15 October relates to work done 16 September to 15 October. It is a nursery school and all staff are paid minimum wage. When we queried when the NMW should come into force we were told by ACAS (pretty sure it was them, cant be 100% without digging out files) that the whole period that the payment related to had to be after the 1 October. Therefore we do not action the NMW until the payment on 15 November. Obviously if we are doing it wrong then we need to amend asap so would be very interested to hear anyone else's thoughts. Is it just me but does it seem that in the payroll world you never seem to get the same answer to ANY question ever!! 

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By paulwakefield1
03rd Oct 2013 10:20

My understanding

is that the rate that applies is that in force at the start of the Pay Reference Period. The PRP is typically the normal pay period for an employee (week, month) but cannot exceed 1 month.

Consequently the new rate applies for PRPs starting on or after 1.10.13.

 

There is a useful guide here:

http://webarchive.nationalarchives.gov.uk/+/http://www.berr.gov.uk/files...

 

It is a bit out of date but the principles have not changed. Unfortunately I don't think it has ever been updated. Does anone know of a newer version?

For a simple concept - only 116 pages of guidance.  :-)

It's quite fun trying to work out the maximum amount somebody can be paid and still fall foul of the NMW regulations. It is surprisingly high.

 

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By paulwakefield1
03rd Oct 2013 10:25

I have just checked the SI for the 2012 increase

"The amendments to the Principal Regulations made by regulation 2(2), (4)(a) and (6) do not apply in relation to a pay reference period beginning before 1st October 2012."

which confirms that the new rates only apply to PRPs beginning on or after 01.10.13

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By Kazmc
03rd Oct 2013 10:59

Help!

Ok, we are now worried that we should be increasing the NMW from the October 15 payrun  (relating to work done 16 Sep - 15 Oct inc.) and not the November 15 pay date as we have always done based on instructions given by ACAS. We were even told by ACAS that we were not even legally bound to calculate 2 weeks at old rate and 2 weeks at new rate, just that the whole period of earning had to commence after 1 Oct.       We have been looking online at what the PRP means but are totally confused, could anyone please explain what the PRP is in laymans terms?      Thankyou

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By paulwakefield1
03rd Oct 2013 11:30

I think you're fine

Whilst it will always hinge around the facts, it sounds as if your pay reference periods run from 16th to 15th and the first relevant period for the new rate will be the one commencing 16th October and payable 15th November.

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By Kazmc
03rd Oct 2013 11:36

Thats..........

That's brilliant, thanks so much for replying Paul

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