Samantha Mann looks at the government's response to the BEIS consultation on salaried hours work and salary sacrifice, which seeks to bring about change to the NMW regulations from April 2020.
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The consultation that closed in March 2019 looked at “a limited number of instances” that employers had previously raised as problem areas during the Good Work Plan consultations and the response that is now provided gives an overview of how the government intend to address these concerns.
The short timescale, in which the changes are being delivered, demonstrates well that the government is wasting no time in delivering on its ambition, for “the UK to be the best place to work and grow a business.”
Here is an overview of how the government is addressing the issues raised in the consultation.
Regulation 21(5) of the National Minimum Wage (NMW) regulations limits a contractual pay frequency for salaried hours work to weekly or monthly. However, as we know, there are more pay frequencies than weekly and monthly and it is not uncommon for employers to operate fortnightly or four-weekly pay frequencies, particularly in the retail sector.
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It's disappointing that there's no change on Salary Sacrifice. This perpetuates the absurd anomaly that means many of the the lowest-paid employees are unable to benefit from an NI saving on their auto-enrolment pension contributions, which is available to everyone else.