National Minimum Wage: consultation on salaried workers and salary sacrifice schemes
17 December 2018
The government has published a consultation which concerns the National Minimum Wage rules regarding salaried workers and the operation of salary sacrifice schemes.
People who perform salaried hours work are paid an annual salary in equal weekly or monthly instalments, for an annual number of hours. For example:
- Monthly paid workers who receive an annual salary for working 9am-5pm, Monday to Friday;
- Term-time only workers who receive equal weekly/monthly payments but only work during term time; or
- Annualised hours workers who receive equal weekly/monthly payments for working 2,000 hours a year.
The legislation provides a set of rules over how compliance with the National Minimum Wage is calculated when regular salaries are paid. Certain conditions must be met in order for work to qualify as salaried hours work under the National Minimum Wage Regulations. This consultation seeks views on how effective these rules are in preventing worker exploitation.
This consultation also seeks views on proposed changes to the National Minimum Wage Regulations which relate specifically to salaried hours work, including Regulations 21 and 24. In particular, the Government would welcome your views on whether, and if so how, it might amend the Regulations to include additional payment cycles and fixing the definition of the calculation year for employers, without any detriment to workers.
Salary sacrifice schemes are used in some workplaces whereby a worker agrees with an employer a lower rate of gross pay in exchange for goods or services (e.g. childcare vouchers, or bicycles). National Minimum Wage regulations include provisions designed to protect workers from unfair deductions from their wages. This consultation also seeks views on the practical operation of these provisions and their effect on workers on the minimum wage.
The Policy team will publish a survey to gather member opinion on the proposals and will also be organising a Think Tank in the New Year. Please watch out for details through News Online.
The National Minimum Wage: consultation on salaried workers and salary sacrifice schemes will run until Friday 1 March.