BEIS consultation on ‘restrictive’ wage conditions welcomed
BEIS launched its consultation on national minimum wage (NMW) rules regarding salaried workers and the operation of salary sacrifice schemes on 17 December.
The consultation, which closes at 11.45pm on 1 March 2019, seeks views on proposed changes to the NMW regulations specifically relating to salaried hours work and where employers feel NMW rules unfairly penalise them without generating any benefit or protection for workers, in addition to the practical operation of salary sacrifice schemes.
According to BEIS, in order for work to be classified as salaried hours work it must meet the following conditions:
- the worker must be entitled under his/her contract to an annual salary
- the worker must be entitled under his/her contract to be paid that salary in respect of a specific number of hours in a year and those hours must be specified in or ascertained in accordance with their contract
- the worker must not be entitled under his/her contract to a payment in respect of basic hours other than an annual salary or an annual salary and performance bonus
- the worker must be entitled under his/her contract to be paid in equal weekly/monthly instalments (excluding overtime payments and a performance bonus) regardless of the number of hours actually worked.
However, according to the consultation document, feedback from businesses – particularly in the retail and hospitality sectors – suggests that some of these conditions are “complex, restrictive, and make complying with legislation difficult.”
Concerns raised
BBPA chief executive Brigid Simmonds welcomed the consultation’s launch, highlighting the need for relaxation of “restrictive” conditions.
“We welcome the decision by BEIS to launch a consultation to make national minimum wage rules more flexible.
“The move comes after the BBPA and others raised concerns over how restrictive the current national minimum wage conditions are, which unfairly penalise responsible companies.
“For example, the current conditions mean that employers who pay on a monthly basis have a month to correct any errors in pay, while those who pay on a weekly basis only get one week to correct any errors.
“The consultation will look at salary sacrifice schemes and their impact on the national minimum wage.
“We would welcome flexibility that is in the interest of the employee for this to address current irregularities. For example, pub chef’s knives, which are commonly bought through salary sacrifice schemes.
“The consultation will also look at salaried workers for national minimum wage purposes but, at present, this does not allow for the inclusion of those who are paid on a fortnightly or four-weekly basis, so in our consultation response we’ll be pushing to support this.
“More broadly, this consultation needs to look into compliance when it comes to the national minimum wage to correctly ensure that protecting workers is front of mind as opposed to penalising businesses for the sake of it.”
Financial stress
As reported by The Morning Advertiser, research by a UK hospitality job board revealed that 65% of hospitality staff planned to leave their current role "in the near future" with 59% revealing plans to move on in the next six months.
The survey found that the most important draw for hospitality staff seeking their next move was career progression – with 16% of respondents flagging this as the most important feature of a new role, with salary highlighted by 14% as most important.
Moreover, tech providers Fourth and Wagestream have both pledged to tackle staff anxiety over festive finances by rolling out a ‘get-paid-as-you-go’ flexible income service to around 4,500 staff nationwide after research by Wagestream found that nearly one in three (29%) shift workers don’t know whether they’ll be paid before Christmas or in January.
