The Residence Nil Rate Band (RNRB) enables certain individuals to leave more of their estate to their direct descendants, by increasing the amount of the estate that is taxed at 0% from up to £325,000 to up to £500,000 Rules that allow these...
Employers are required to pay at least National Minimum Wage (NMW) to employees and workers. The current rate is £6.50 for adults of 21 and over, £5.13 for age 18 – 20 year olds and £3.64 for those under 18. Apprentices are entitled to £2.73 per hour, subject to some restrictions.
Some workers are excluded from the NMW, such as those who are self-employed, resident workers (e.g. au pairs, resident home help etc.) or a trainee on most government training schemes. However, agency workers, some apprentices, some home workers and carers and workers “on call” are covered by the NMW. There are not exhaustive lists.
NMW is total pay before deductions such as tax and national insurance. However, some payments are excluded from the calculation of total pay such as loans, advances on wages, a pension payment, a lump sum on retirement, a redundancy payment, a reward under a staff suggestion scheme and tips, gratuities, service charges and cover charges. Before October 2009 tips etc. could count towards the NMW as long as they were paid through the pay roll. However, they are now no longer included in the NMW, and therefore pay, excluding tips etc., must meet NMW level.
HMRC enforce the national minimum wage and if they find that an employer has under paid they will issue a Notice of Underpayment. This will show the arrears the employer must pay to its workers and the penalty to be paid to HMRC. The penalty is 50% of the total underpayment with a minimum penalty of £100 and a maximum of £5,000. If an employer pays the arrears to its staff and the penalty within 14 days of the Notice, the employer will only need to pay half the penalty.
In the same way as employers must pay NMW to employees and workers, employers must also comply with the Working Time Regulations (WTR). These Regulations were introduced on Health and Safety grounds and, amongst other things, require that employees and workers work no more than a 48 hour week, unless they waive their right, and have 28 days’ paid holiday per annum, which can include Bank Holidays. They are also entitled to rest breaks.
If you anticipate you will regularly need your employees and workers to work more than 48 hours a week, they need to agree this in writin, but they do have the right to cancel the agreement upon giving the employer notice. An employer can require its workers to give up to 3 months’ notice of any wish to cancel the agreement.
With regard to holiday entitlement, an employer cannot legally “buy off” holiday entitlement by pay in lieu, except at the termination of employment. If an employee is leaving an employer can require them to take their holiday before they go. Generally, unless an employer agrees it, employees have no right to carry holiday forward into the next year. Workers are entitled to be paid whilst on holiday and their pay is calculated based on normal working hours. Overtime does not have to be taken into account. Some employers pay “rolled up holiday pay”. This is usually on the basis that the hourly rate of pay includes an amount for holiday pay and the employee is expected to save this part of their pay to cover their holidays. This is usually unlawful unless the holiday pay is paid on top of the basic pay and it is clear what amount of rolled up holiday pay is being paid and shown on the payslip. This is a difficult area and can lay the employer open to claims from workers through the Employment Tribunal for unpaid holiday pay. It is preferable to pay holiday pay as normal pay during holiday absences.
The WTR also make provision for daily and weekly rest breaks and rest breaks during the working day. Workers of 18 and over are entitled to a break of not less than 20 minutes for every 6 hours worked. For younger workers it is 30 minutes for every 4½ hours working time.
The above is a general over view of the Working Time Regulations and rights to National Minimum Wage. Calculations of these entitlements can be complicated if you employ shift workers, part-time workers or those who work irregular hours.
For further information please contact:
Marina Vincent on 020 8422 5678