Amendments to National Minimum Wage regulations

02 April 2020

Amendments to legislation have been laid that make technical changes to rules relating to the National Minimum Wage (NMW).

There are two sets of amendments – one which serves solely to increase the NMW rates to bring them in line with recommendations made by the Low Pay Commission (LPC), which were confirmed back in December 2019 as being effective from 1 April 2020.

The second set of regulations make certain technical amendments to how NMW is calculated. The changes mirror some of those explained within the response to the consultation ‘Salaried workers and salary sacrifice schemes: changing the National Minimum Wage rules’. The consultation was published by the Department for Business, Energy and Industrial Strategy (BEIS), and ran from 17 December 2018 to 1 March 2019. It sought views on proposed changes to NMW regulations which related specifically to salaried hours work, and where employers felt that NMW rules unfairly penalised them with no clear benefit or protection for workers. It also requested feedback on the practical operation of salary sacrifice schemes.

The key changes within the legislation are the removal of “salary premiums” from the calculation of annual salary pay or basic hours. Additionally, employers now have the option to change a calculation year for salaried workers, if they give at least three months’ written notice to affected workers, and providing that certain circumstances are met.

The amendments also mean that where a reduction in pay has been made to comply with a requirement imposed by the employer then this will not be classed as a reduction to a worker’s remuneration for the purpose of calculating the rate at which a worker has been paid, as long as the employer intends to, or already has, reimbursed the worker for that purchase.  The same arrangement applies in terms of deductions and payments relating to a worker’s expenditure that is connected to their employment.

 


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