At least two million people will be affected by the new minimum wage this April. Below we have listed the new national minimum wage along with other rates of pay that will change in April.
Deduction of wages is a common dispute between an employer and employee or even an ex-employee, and one that can land an employer at an Employment Tribunal if not completed correctly.
Employers risk unlawful deduction of wages claims or claims that the employer has not paid National Minimum Wage (NMW) if they have made a deduction from an employee’s wage in the wrong way.
Other than the normal reasons for deductions (such as tax and NI contributions) what can an employer legally deduct from an employee’s wages?
We’ve identified different types of deductions that an employer can make and looked at how they can make these deductions safely.
Overpayment of wages
An employer has every right to deduct any overpayments from an employee’s wages. In the case of an overpayment, as the employee has already benefited from the money in a previous wage payment the employer has the right to make deductions that takes the employee below NMW.
However, to act reasonably, it is advised that the employer should attempt agree on a payment plan with the employee to pay back what is owed, especially if the deduction would take the employee below NMW.
If there has been a court order (such as Child Support Agency payments or an Attachment of Earnings order) then an employer has the right to deduct these from an employee’s wages. In this instance, if the employer does not comply with any such deductions then they could find themselves in contempt of court.
However, it is imperative that court orders should not take an employee’s wage below NMW.
If there is a contractual clause that allows the employer to deduct money from an employee’s wages they can do so. This could be for not returning company property or other contractual benefits.
If there is no contractual clause that allows such deductions, employers and employees can come to an agreement to make deductions. It is best practice to get any such agreements in writing and ideally prior to the deductions commencing.
On occasions when an employee has missed work due to being on strike or taking industrial action, the employer is able to deduct for such activities.
A training agreement should be an independent agreement that is separate from the contract of employment. Usually this will take the form of a ‘loan’, where the employer stipulates how much the employee will be liable to pay back should the employee leave within a certain time period of the training course. To be as reasonable as possible it is advised that the repayment amount should be pro-rata the longer the employee remains employed.
It is vital that the employer and employee agree these terms in advance of the employee completing the training. It is very difficult for an employer to make reasonable deductions for training if the terms are not set in advance.
In 2018 many well-known retail operations were fined for failing to pay staff the National Minimum Wage. However, this was not because of obvious deductions that the employers had made.
As per statutory law, employers may require workers to wear specific uniforms. If the employer requires the worker to purchase specific items, such as overalls, then this should be accounted for within their wage.
Wagamamma and TGI Friday’s were caught short on this point and subsequently fined for not paying NMW. This is because they expected employees to buy particular parts of their uniform, (i.e. black jeans). It was concluded by HMRC that asking employees to buy any part of their own uniform pushed the employees below NMW in their first pay cheque.
If an employer provides a uniform, without any charge, any deductions the employer makes for ordinary wear and tear to that uniform will reduce the employee’s pay rate, potentially causing the employee to fall below NMW. However, if the worker damages the uniform, loses it or does not return it at the end of the employment, the employer can deduct this from the employee’s wage.
To avoid any confusion between employer and employee on whose responsibility it is to maintain uniforms, employers are urged to have clear uniform policies and procedures. Where necessary, paying a uniform supplement could be beneficial.
Another common question we’re asked is if an employee damages company property, can this be deducted from their wages?
The employer cannot deduct the costs from the employees wage without written consent from the employee. There also needs to be a clause in the Contract of Employment which gives the employer the authority to do so.
In the absence of a contractual clause that enables an employer to make deductions from wages, both parties can come to an agreement for the deduction to be made. It is suggested that an employer ensures they receive written authorisation from the employee to make any such deductions from their wages. This will be useful should the employee decide to take it to Tribunal for unlawful deduction from wages.
If a deduction of this nature should happen, you need to ensure that the cost must be a ‘reasonable reflection of the cost of repair’. Meaning, the payment cannot be more than the cost of the damage to the property. Anything more could be seen as a penalty clause and will therefore not be enforceable.
Any deduction has to be reasonable, and employers need to ensure that they deal with each employee to fit their particular circumstances. You also need to ensure that the amount that you deduct does not take the employee below National Minimum Wage.
Transparency is key
Having a clear policy in place about deductions will make any need to implement it easy for both employers and employees. It is also worth considering that if the employee has to go to any financial expense for the business, or under the order of the business, the employer should not allow the employee to fall below NMW.
If you have any concerns with employee deductions or want to change your current systems and processes, contact one of our Employment Law Advisers on 0161 603 2156 for advice or to arrange your free consultation.
Stress is a serious condition that can impact many employees. It is vital that employers recognise and identify stress before it escalates or exacerbates other serious mental or physical health problems.
The Health and Safety Executive estimates that over 15.4 million work days were lost to work related stress, depression or anxiety in 2017/18, costing the economy approximately £6.5 billion each year.
So how do you identify and manage stress in the workplace and how can employers help support employees’ wellbeing?
Consider the demands on the employee
Is the workload reasonable? Employers have a legal responsibility set out by the Health and Safety Executive to assess the risk of work related stress and to take measures to control this. Ensuring that the work level is appropriate and time demands are achievable is one way to reduce the stress of an employee.
Giving employees unrealistic targets may increase their stress and increase the employee’s dissatisfaction at work. This in turn can lead to underperformance costing businesses potential profit.
Be aware that this will be different for each employee so one size fits all is not the case here.
Training and support
Ensuring that employees are fully trained to do their role is important. Employees who are uncertain of what they are doing or lack the capability to do the role will feel an increased level of stress. Reviewing employee training and holding regular reviews will help them feel more supported.
This is a particularly important factor when it comes to staff retention in roles where the skills needed are in high demand in the labour market.
Ensuring that all managers have a consistent approach to managing stress within the workplace is key as an inconsistent approach will encourage divisions within the company and ultimately may lead to staff resignations.
Training managers in consistency and to listen and talk to their employees could reduce the likelihood of employees going off sick or even long term sickness absence.
Improving team relationships
Having a good support network helps reduce stress levels, so creating this environment within teams is essential. If employees have others to discuss, or even share workloads, bounce ideas off and indeed have peers to turn to if they are struggling will produce a more efficient and less stressed workforce.
A team does not always have to be peers who are working in the same job. They can be people in the same office, on the same desk or employees who carry out similar functions.
Having strong teams can also help improve knowledge sharing and reduce any key person dependencies that a business may have.
Consider an Employee Assistance Programme (EAP)
EAPs are becoming very popular within the working environment and are intended to help employees deal with personal problems that could negatively impact their performance at work.
Many also offer support to people living within the employee’s household, acknowledging that the mental wellbeing of family can also impact on the employee’s mental wellbeing.
Flexible working contributes to employees feeling trusted, appreciated and, managed well, will reduce their stress levels both in and outside of the workplace.
Working flexibly empowers employees and helps them juggle the pressures and demands in their personal life and balance that with the pressures of work. Giving staff more autonomy over their working day can increase productivity for the time the employee is in work.
Being flexible can also actively reduce stress levels by enabling employees to avoid stressful situations such as rush hour traffic, and subsequently difficult commutes and simplifying childcare arrangements.
While many employees enjoy and are motivated by challenges, ensuring that these are achievable and reasonable will help ambitious employees achieve more. When setting targets, assess each employee and the workplace ensuring you get the right balance between motivating staff members and not overloading the employee with workload they will not be able to manage.
Having a proactive policy in place to deal with stress will avoid employees going into ‘burnout’ and impacting negatively on the performance of the business.
If you’d like to find out more about how to implement an employee assistance programme and the associated costs or for further advice on managing employee stress contact one of our Employment Law Advisers on 0161 603 2156 to arrange your free initial consultation.
According to research from the Centre of Economic and Business Research, absence rates are predicted to cost the UK £18 billion in 2020, increasing to £26billion in 2030.
Absence Management is always a difficult area of employment law for employers to navigate and is fraught with risk.
Most employers want to create an environment that fosters a good work ethic and a healthy environment which supports staff members when they are ill. However, employers are also concerned on the impact absences have on the profitability of the company.
The purpose of this article is to look at effective ways to manage poor absence management, without putting your business at risk.
Is the illness long or short term?
When an employee is off sick it is vital to understand if the illness is long term or short term.
An employee who has persistent short term illnesses, (i.e. a cough, cold or the flu) could potentially be managed for their poor conduct via the business’ disciplinary procedures. An employee should make every effort to attend work, and calling in sick persistently could be classed as poor conduct. It would be advisable to consult your contract to see if there are any clauses regarding persistent absences and conduct.
However, if an employee has a long term illness they may be covered by the Equality Act 2010 which protects any employees from wrongful or unfair dismissals linked to their condition.
Treating employees less favourably because of a disability could be considered discrimination.
If the employee has a long term condition, then it may be appropriate to follow a medical capability process. The purpose of a medical capability process is to investigate the employee’s ability to perform his or her role in the long term. As this is a risky area of Employment Law, it is best to seek advice before coming to any such conclusions.
Return to work interviews
Investigating why an employee is off sick will help you determine if the absence is long term or short term. Return to work interviews are an excellent tool which will help employers conduct this investigation.
It is advised to hold a return to work interview after each absence as this creates a log of why that employee was absent. It is important that the manager gains a good understanding of the following areas within the meeting:
Have clear policies in place
While it is easy to point out employees with persistent absences over a short period, it is more challenging to identify this over a longer period.
Having a clear absence management policy that everyone must abide by can help proactively manage employees who go off with persistent absences. It may also be considered a deterrent for employees who are considering having lots of absences.
The policy should clearly set out the differences between short term persistent absences, and those absences that could be covered by the Equality Act.
Ensuring that all managers have a consistent approach to absence management is vital.
A poorly trained manager who does not understand the absence management process could inadvertently cause a claim at tribunal, especially if the employee is covered by the Equality Act.
Training managers to listen and talk to their employees could reduce the likelihood of the employee going off sick again in the near future. It could also help the company put in place suitable reasonable adjustments which could reduce an employee’s absence rate.
As stated previously, treating employees less favourably because of a disability could be considered discrimination, so training for managers will also reduce the risk of an employee bringing about a claim of discrimination at tribunal.
Consider an Employee Assistance Programme
Employee Assistance Programmes (EAPs) are beneficial for employees who need additional support or counselling. While not the cheapest option, EAPs can help employees deal with personal problems that could negatively impact on their performance at work. Most EAPS offer counselling and advice on mental health, financial difficulties and legal matters. They often extend this support to people living within the employee’s household.
According to research from the Organisation for Economic Co-operation and Development (OECD), poor mental health was the most common cause of absence within the UK in 2017. Offering additional support in this area could help businesses reduce employee absence.
Absences within a business are inevitable, and no absence management policy will stop employees from needing time off to rest and recuperate after an illness.
However, a strong absence management policy executed with a consistent approach across the business can help reduce employees taking advantage of sick days and help protect vulnerable employees who need additional support.
If you don’t have an absence management policy in place or want to have your existing policy reviewed then Supportis can help – call one of ourEmployment Law Advisers on 0161 603 2156 to arrange your free initial consultation.
Jessica Varnish, a British track cyclist and multiple world Commonwealth and European Championship medallist has recently lost her claim in an Employment Tribunal against British Cycling and UK Sport.
Jessica claimed that she was an employee of British Cycling and UK Sport, making claims at an Employment Tribunal for Unfair Dismissal, Sex Discrimination and Protected Disclosure (formerly known as Whistleblowing) against the two organisations.
The Tribunal found that Jessica was neither an employee nor a worker of either of the organisations. Therefore, the Cyclist was unable to make any claims at an Employment Tribunal. In order to bring such claims the claimant (person making the claims) must be an established employee or worker.
It was determined that both British Cycling and UK Sport were merely service providers, providing support to talented athletes and that the relationship with the athletes was not of an employer-employee type relationship.
Regularly reviewing the level of obligations each party holds is vital to understanding whether you are in serious breach of Employment Law legislation.
Responsibilities to employees and self-employed individuals are entirely different and if you are unclear on what your relationship is you are placing your organisation at risk of being made to award large sums at tribunal.
Lacking knowledge and understanding of the type of relationship you hold could mean that you are in serious breach of the Employment Law legislations. Should it be established that there is an employer-employee relationship where you had counted the employee as self-employed, it can result in large sums of award and compensation being paid to the employee.
At the core of the Supportis service is a top to bottom review of your business which enables us to provide you with ongoing bespoke advice. As part of this review (and ongoing advice) we ensure your organisation is aware of the level of obligations they hold and determine whether there is an employer-employee relationship or whether individuals are self-employed.
For more information or to book a free consultation please call our Employment Law Advisers on 0161 603 2156.
In recent years, the Government have made many changes within education, the biggest being the changes in the GCSE grading. But what are the new grades and how can employers best understand them?
We’ve taken a look at the new grading system and summed it up below to help keep employers in the loop.
The new grading system runs from 1- 9, replacing the old A* to G system.
The new system has been designed, according to the Department for Education (DfE), to create a more rigorous approach to testing and examination. The new system identifies Grade 1 as the lowest possible grade available running up to Grade 9, which was intended to be a ‘new’ grade that identified those students whose performance was exceptional.
However, employers should be aware, the DfE has stressed that the old and new grading systems cannot be directly compared, and some new grades will span over two of the previous grade boundaries.
*Taken from Gov OFqual website
There are now two grades considered to be a pass: a Grade 4 is considered a standard pass, with a Grade 5 being considered a good pass.
Changing grade boundaries
Under the new grading system, boundaries are not fixed for the award of marks, meaning that fluctuations in the expected standard can occur every year in every subject.
The government have argued that this is to make grading fairer as previously it was impossible to say in advance how hard pupils would find the paper. This, in principle, allows exam boards to create rigorous standards for the awarding of grades, meaning that theoretically, students leaving secondary schools across the country are as well equipped, academically, as they ever have been for life in the modern workplace.
For the first year of the new GCSE (August 2017) the grade boundaries were calculated arithmetically. Therefore, once all the GCSEs were graded 9 to 1, the top 20% of those students achieving grade 7 or above were automatically be upgraded to a grade 9. The formula used in 2017 was:
Percentage of those achieving at least a grade 7 who will be awarded a grade 9 = 7% + 0.5 × (percentage of students awarded grade 7 and above)
It is unclear if this is going to be the formula that is moving forward each year, or how this will impact those who achieve a lower grade.
Are the new GCSEs actually harder?
While this will always be a difficult question to answer, many professionals believe that the new system benefits only the very high achievers.
If the pupil does not gain a Grade 4 or above, they will have to re-sit again until they achieve the pass mark. Once the pupil has reached the aged of 19, they will no longer have to re-sit unless they wish to proceed to further education.
The Teacher’s Union (NASUWT) has condemned the new grades, saying that it makes teaching in an increasingly difficult climate even harder. Teachers are struggling to grade mock exams, with no idea how pupils will be graded when it comes to the real thing. Even in light of the most recent set of exam data, education professionals remain unconvinced of the quality and suitability of the new grades to effectively measure student progress and achievement.
Chris Keates, general secretary of the NASUWT condemned the Government’s new scheme saying that changes have only been driven by ‘political imperative’.
So what do employers need to consider?
As an employer you should be aware of the new grading system, in particular the idea that the higher the number is, the better quality the grade achieved is. Additionally, the notion of two passing grades, the standard pass and good pass, could be a relevant factor when sifting and reviewing prospective employees at an early stage. With education being an ever-changing aspect of modern life, subject to the whims of Government, every employer would benefit from keeping a close eye on any developments and changes to ensure that they are able to identify and procure the best candidates suited to their business.