This month we focus on employers’ obligations in the areas of pay and we take a look at issues around time off. We update you on our recent blogging activity and offer you a special little something.
Many employers like to think what they pay their staff is up to them, but although partly true, there are several regulations which employers must comply with and failure to comply can lead to fines.
National Minimum Wage
The National Minimum Wage was first introduced in 1999 when the Low Pay commission was set up. The rate for employees over the age of 21 was £3.60. It was believed that just under 2 million employees were earning less than this. The rate is revised every spring and an annual increase takes effect in October each year. The current rate for employees over 21 is £6.31 (a full list of age related rates together with annual salaries can be found on our resources page). There are currently calls for the next increase to be more substantial as a result of the improving economy and the increased cost of living. While broadly accepted, there is significant concern among small employers who may be forced to reduce headcount or hours to ensure affordability.
All employers must comply with these rates and failure to do so leads to financial penalties. Employers who are found guilty of under payment may have to pay each employee what they are owed, plus a fine of an equal amount up to £20,000 for each underpaid employee. If approved by Parliament, these new fines could come into force in February. The key to making this work is rigorous enforcement and there is a suggestion that employers who fail to comply will be named and shamed.
Equal pay legislation has been on the statue books since 1970, but still causes employers significant problems today and only last month, the latest figures from the Office for National Statistics (ONS) showed a gender pay gap of 10% an increase of 0.5% on the previous year. Birmingham City Council have announced that they may need to sell off Council property such as the NEC to meet their Equal Pay claims.
When setting salaries, it is essential that employers ensure a fair, transparent and non discriminatory pay and grading structure is in place. Employers of all sizes can find themselves with an equal pay claim.
Part time workers
Legislation protecting part time workers came into force in 2000 and is designed to ensure that part time works are treated equally to comparable full time employees. Their rates of pay, bonuses and access to benefits should all be equal to full time colleagues albeit on a pro rata basis where practical – cars, healthcare, life assurance etc are all full benefits regardless of the hours worked, but pay and pension contributions should be pro rated, but at the same rate i.e. £10 per hour or 5% of gross salary respectively.
If found to be in breach of this legislation by an employment tribunal, compensation will be awarded to the employee at a level set by the tribunal.
Apart from annual leave and bank holidays, there are many reasons why an employee may take time off from work. Typical reasons for leave are sickness, child or elder care responsibilities, jury service, reservist duties, marriage, house moving or bereavement.
It is essential that all organisations, both large and small, have clear documented policies on time off entitlements and corresponding pay entitlements. It is also really important that policies are applied consistently across the business to ensure fairness and avoid the risk of discrimination or excessive costs to the business.
There has recently been a lot of debate about time off as a result of bereavement. Everyone reacts differently to death and there is an argument for a more flexible, individual approach to leave and pay in the event of bereavement. Common practice is that an employee would be given five days unpaid leave in the event of the death of a close relative – parent, spouse, sibling or child. Common grey areas are best friends, grandparents and in-laws. There is also often issues raised about the days leading up to a death and the time between the death and the funeral as this can vary significantly between different cultures and traditions.
There is a call for statutory paid time off in the event of a bereavement and a need for employers to demonstrate compassion and understanding when dealing with bereaved employees. Bringing a grieving employee back to work after just a few days can have a significantly detrimental impact on the employees, their colleagues and their work. While some people will want to get back to work as quickly as possible, for some (especially in the case of sudden, unexpected deaths), there is a real need to come to terms with their loss. Employers could loose excellent staff permanently if they don’t support them appropriately in their time of need.
Clear policies and procedures are essential and these should be written with compassion and a desire to support and retain employees over the long term.
While not prolific bloggers, we do try to keep our readership engaged with relevant HR issues. Recently blogs have included “Pupils and Abusive Relationships: How can HR help?” and “How well does your school promote equality” for our educational sector clients and “Who gets the money” and “Interesting Interview Techniques” for our commercial clients.
Do take a look and join the conversation, leaving us your thoughts, comments and questions on our blogs. If you have a topic you would like us to cover, do let us know.
Our business grows on referrals and therefore for the first three months of this year, we are offering a referral ‘Thank You’. If you refer a new client to us who is invoiced between January and March 2014, you will earn yourself (or your business) a £25 Marks and Spencer voucher as a Thank You from us, to you.