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    With effect from 1 April 2017, the National Living Wage rate will rise by 30p an hour to £7.50 an hour. This applies to all workers aged 25 or over.

    In addition to the increased National Living Wage, the following increases to the National Minimum Wage rates will also apply:
    • 21 to 24 year-olds will increase by 10p to £7.05 an hour;
    • 18 to 20 year-olds will increase by 5p to £5.60 an hour;
    • 16 to 17 year-olds will increase by 5p to £4.05 an hour;
    • Apprentices aged under 19 (or 19 or over in the first year of their apprenticeship) will increase by 10p to £3.50 an hour.

    Employers therefore need to prepare for these changes and ensure that they write to workers to inform them of their new rate of pay. NB: All national wage rates will increase on an annual basis (on the 1st April of each year) going forward.

    Who is entitled to the National Minimum Wage?
    Almost everyone who works in the UK is legally entitled to be paid the National Minimum Wage. This is the case even if a worker or employee signs a contract that says they are entitled to a lower rate of pay. It isn’t necessary to be in full-time employment or to work at an employer’s premises. For example you are entitled to receive the National Minimum Wage if you are;

    • Employed by an agency
    • An apprentice
    • A home-worker
    • A part-time worker
    • A casual worker
    • A pieceworker
    • A worker on a short term contract
    • Foreign workers
    • Offshore workers

    However, you are not entitled to receive the National Minimum Wage if you are:
    • A worker under school leaving age (i.e. not turned 16 by the last Friday in June of any school)
    • Genuinely self-employed
    • Volunteers
    • An au pair
    • In the armed services
    • A voluntary worker

    How can you ensure compliance with the National Minimum Wage rates?
    As an employer you are legally required to keep sufficient records to show you are paying your workers at least the NMW for the hours they work. For many employers, existing payroll and business records will be sufficient and there will be no need to maintain separate records. For example, where employees are paid at an hourly rate for hours worked it will be easy to demonstrate through records that the National Minimum Wage has been paid. However, where salaried staff are contracted to work a certain number of hours each week, care should be taken to ensure and to be able to evidence that if additional hours are worked this does not mean they receive less than the National Minimum Wage.

    How is the National Minimum Wage enforced?

    It is a criminal offence for employers to not pay the correct national wage rates or to falsify pay records. An employee may therefore pursue a complaint by putting a claim into an Employment Tribunal for unlawful deductions from wages. This is because the right to receive the National Minimum Wage is implied into all employees’ contracts of employment.

    An employee or worker may also make a complaint to the Pay and Work Rights Helpline who can then put a complaint into the HMRC. A compliance officer in the department for the National Minimum Wage will then undertake a full investigation into the Employer’s pay records. The HMRC are then able to order the Employer to pay arrears to the employee and if the employer fails to do so, the HMRC can bring a case to an Employment Tribunal or civil court on the employee’s behalf to recover the money. Employees are entitled to have any arrears paid at the current NMW rate, if it is higher than the rate in force when the arrears came about.

    Call us now on 0161 478 3800 for more information or advice or alternatively email us hello@peachlaw.co.uk



    The gender pay gap refers to the difference between women’s and men’s average weekly full-time earnings, and it is expressed as a percentage of men’s earnings.

    What is Gender pay reporting?
    The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 is legislation which requires employers with 250 plus employees (at the ‘snapshot’ date, being 5 April 2017), to publish statutory calculations every 12 months’ to show if there is, and if so, what the pay gap between female and male employees is.

    Employers will be required to publish their first gender pay gap reports in respect of the 2017 statistics by 4 April 2018.

    Points to note for employers
    • The regulations are intended to apply to private, voluntary-sector and public employers.

    • Commencing in April 2017, employers with 250 plus employees must comply with the regulations each year.

    • For the purposes of the regulations, the definition of an employee includes workers, as well as some self-employed people. Agency workers are included, however, they will be included in the headcount of the agency providing them.

    • The report requires an employer to publish six calculations showing:
    i.) average gender pay gap as a mean average,
    ii.) average gender pay gap as a median average,
    iii.) average bonus gender pay gap as a mean average,
    iv.) average bonus gender pay gap as a median average,
    v.) proportion of males receiving a bonus payment and proportion of females
    receiving a bonus payment,
    vi.) proportion of males and females when divided into four groups ordered from
    lowest to highest pay (the employees should be divided into four sections, each comprising, so far as is possible, of an equal number of employees, to determine the lower, lower middle, upper middle and upper pay bands).

    • Employers have the option to provide a narrative with their calculations, to explain the reasons for the results and give details about actions that are being taken to reduce, or eliminate the gender pay gap.

    • Gender pay reporting is a different requirement to that of carrying out an equal pay audit. An equal pay audit involves comparing the pay of men and women doing the same jobs, similar jobs, or work of equal value within an organisation. Equal pay means that men and women in the same employment, performing equal work must receive equal pay, as set out in the Equality Act 2010.

    • The gender pay gap is a measure of the difference between men’s and women’s average earnings across an organisation or the labour market. It is expressed as a percentage of men’s earnings.

    What should be done with the calculations?
    The results must be published on the employer’s website and a government website. They must be confirmed in a written statement by an appropriate person, such as a chief executive.

    Whilst the regulations come in to force in April 2017, and currently will only affect employers with 250 plus staff, we would suggest that those business’ who are nearing that threshold should consider the advantages of preparing such a report. We would recommend that business’ take steps in preparation for when they do reach the 250-employee threshold.

    Should you require any further detail in respect of the gender pay gap reporting procedures, and/or details of how this may affect your business, please do not hesitate to contact Peach Law on 0161 478 3800 or on hello@peachlaw.co.uk to speak with our Employment Law team.

    No, according to the Court of Justice of the European Union (CJEU).

    The CJEU in its decision in the case of ‘Achbita -v- G4S Secure Solutions NV’, has held that the banning of a headscarf does not constitute direct discrimination in the work place. The decision means that in theory employers can put policies in to place which ban the visible wearing of political, philosophical or religious symbols, should they choose to do so.

    The wearing of religious symbols in the work place has been a hot topic in the press over the past 18 months and readers may recall the similar cases of ‘Bougnaoui -v- Micropole SA’, dealing with an employee wearing a hijab, and ‘Eweida -v- British Airways’, dealing with an employee wearing a cross necklace, both, notable cases which dealt with the wearing of visible religious symbols in the workplace.

    The decision of the CJEU, has found that prohibiting an employee from wearing a headscarf can be justified by an employer’s general policy of neutrality. This can be justified where the ban is applied consistently to all visible signs of religious or philosophical beliefs. In this case, the employer, G4S operated a policy of ‘neutrality’, which prevented employees from wearing political or religious symbols.

    The CJEU has held that G4S’ policy did not amount to direct discrimination on the grounds of religion as it was to be applied to all religious symbols. Accordingly, the policy did not treat one religion less favourably than another religion.

    The outcome
    If an employer has an internal policy which bans the wearing of visible political, philosophical or religious symbols in the workplace, such as a headscarf, it will not amount to direct discrimination based on religion or belief, if it is part of a policy of neutrality. Employers should however, note that such a ban could potentially constitute indirect discrimination if the neutral obligation it imposes means that employees with certain beliefs, or those following a particular religion are being put at a disadvantage.

    What does this mean for business?
    This judgment really demonstrates to business’ the importance of having clear and well drafted policies in place, which must be applied equally to all staff.

    The ruling does not mean that a business can place outright bans on religious clothing in the workplace, and employers should be cautious of imposing bans. We would advise that forethought is given when considering putting such a policy in place, the business should ask itself; what is the reasoning behind the policy? what impact will this have on the staff, and will it potentially affect morale? How are staff likely to react to such a policy? and, would it be a policy that would affect one particular section of the workforce only and not others?

    Despite the ruling in this case, there is the potential for employers to fall foul of discrimination law when implementing policies such as these. All employers should adopt a cautious approach when considering putting bans/prohibitions in place, and always seek legal advice before taking any action.

    Should you have any questions on this topic, or if you need advice with regards to any existing or new policies, please contact Lindsey or Sarah on 0161 478 3800 or email us at hello@peachlaw.co.uk.

    Changes to tax law IR35 (intermediaries’ legislation) and the way in which Contractors within the public-sector are being brought in…

    Contractors are used in many areas of work, and are often contracted through an intermediary, or a personal services company (PSC), for example a limited company. A benefit for a Contractor in doing this can include taking advantage of the more favourable tax rules that are afforded to companies, rather than to individuals.

    Beginning in April 2017, changes will come in to force which will impact business’ who supply contract labour to the public sector.

    Previously, the provisions under IR35 allowed PSC’s to decide whether or not to deduct tax and national insurance contributions from income earned by the Contractor, however, as of April 2017, this will be the decision of the public body, or third party who is engaging the Contractor.

    To assist an online tool to determine employment status that has been produced by HMRC, which can be found here. This tool is however, in its current form very basic.

    Those Contractors affected by this change will be required to pay tax and national insurance contributions deducted at source by the public-sector body, as if they were employees. It is important to note however, that despite these Contractor’s being viewed as employees for tax purposes, this does not entitle them to employment rights, for example the ability to claim unfair dismissal.

    Where an agency (third party) places staff into a public-sector body and pays the PSC, the agency will be responsible for applying the decision made by the public sector and deducting tax, overall, we envisage that this may mean that there are some additional administrative costs for agencies.

    The outcome

    It is believed that PSC Contractors will begin to turn their backs on the public sector work and this may lead to a shortfall in skills, watch this space…

    If you are confused about the IR35 changes or would like to discuss the potential consequences of the changes, please contact our employment law team on 0161 478 3800 or on hello@peachlaw.co.uk.

    Parents will be able to apply for both Tax-Free Childcare and 30 hours free childcare at the same time, through a joint childcare service. Parents can now sign up to receive an email update which will notify them when they are able to apply.

    You will not be committing to either but will be alerted when you are eligible.

    As part of Apprenticeship Week we have focused on the up and coming Apprenticeship Levy.

    Apprenticeships have been seen as one to the key programmes to assist with skill shortages and supporting businesses with the recruitment and retention of staff. The Government are keen to encourage employers to invest in apprenticeships and in 2015 they announced that there will be an Apprenticeship levy to be introduced. What does this mean for your business? The CIPD have published a guide for employers on how the apprenticeship levy will work.

    Please see below a summary of key points for you to consider;
    • Effective from 6 April 2017
    • The levy will require employers with a UK paybill of more than £3m a year to pay 0.5% of their paybill to fund apprenticeship costs.
    • Up to employers to notify HMRC each month – payment will be taken in real time.
    • Apprenticeships are a devolved policy, which means that authorities in each of the UK nations manage their own apprenticeship.
    • Although the levy is calculated on UK paybill, employers can only spend their English portion on English apprenticeship training.
    • Employees can be apprentices at any age.
    • Employers will receive a £15,000 fixed annual allowance (not a cash payment) to offset against the levy payment.
    •Employers who are not liable for levy payments will also experience changes in apprenticeship funding, and will be required to co-invest. The Government will contribute 90% of the cost of training with employers paying the remaining 10%.

    When recruiting apprentices it is important to consider your own business strategy. Are you clear about how apprenticeships are aligned with that strategy?

    Liaise and meet with apprenticeship providers. It is important for you to choose one that knows and understands what the business is about and the knowledge and skills that are needed.

    For more support on what the Apprenticeship Levy means for you and recruiting Apprentices please contact one of our HR Specialists on 0161 478 3800 or email hello@peachlaw.co.uk.

    British Gas has been refused leave to appeal by the Supreme Court in the long-running case regarding the payment of commission during holiday.

    Readers may recall the case that we have previously reported on of ‘British Gas -v- Lock’, it was a significant case for employers with regards to how holiday payments are made to employees. The case was previously heard at the Employment Tribunal, the Employment Appeals Tribunal and then the Court of Appeal, with each forum concluding that commission payments should form part of holiday payments.

    The Supreme Court, which is the final court for appeal within the UK has now refused an application to appeal the decision, which finally brings this matter to a close. The overall outcome is that holiday pay must include compensation for any results-based commission that would ordinarily be earned by a worker.

    Originally the Employment Tribunal sought confirmation from the European Court of Justice (ECJ) for clarification on whether or not it was a breach of the Working Time Directive or the Working Time Regulations 1998 to limit the calculation of a week’s pay for annual leave to basic pay and to exclude commission. The ECJ decision was that commission payments must be included in the calculation of holiday pay.

    Overall, the Supreme Court’s decision to disallow a further appeal on this matter means that British Gas, the company at the centre of this case will have to compensate Mr Lock, the Claimant for his losses, and ultimately, many other employers who have been watching in the side lines may now have to stump up more money to their employees.

    Some commentators on this long running case believe that Brexit could have an impact on this outcome as the Working Time Regulations, derive directly from the European Union. Watch this space!

    Should you require any advice on holiday pay please do not hesitate to contact out legal team on 0161 478 3800 or on hello@peachlaw.co.uk.

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