National Minimum Wage to be made easier to administer

12th February 2020

Changes are to be made to the National Minimum Wage (NMW) through improvements to the calculation, as well as the guidance and support offered to employers and employees.

Responding to submissions to its 2019 consultation, the government says it will amend the NMW rules to:

  • allow salaried hours workers to be paid in additional equal instalments, such as fortnightly or four-weekly;
  • provide employers with the discretion to choose a calculation year for their workers; and
  • allow employers to make premium payments to their salaried hours workers in respect of basic hours, and to allow salaried hours workers’ contracts to specify these premium pay arrangements. These payments will not form part of the workers’ remuneration for calculating NMW pay.

In addition, the government says it will:

  • Improve NMW guidance available through GOV.UK, making it more accessible and easier to navigate.
  • Waive financial penalties and other sanctions for employers for certain breaches of the rules relating to salary sacrifice and pay deductions.
  • Resume the NMW name and shame scheme, but also providing a quarterly bulletin to help educate employers and workers on common compliance issues. HMRC will name employers more frequently, and most employers will only be considered where there are arrears of over £500.
  • Proactively provide support to new, small businesses through selected visits.
  • Provide more support via an employer helpline for those who operate deduction or salary sacrifice schemes.

Next steps

Secondary legislation will be brought forward to action the above and updated guidance will appear on GOV.UK in due course.

If you have any queries about paying the NMW or salary sacrifice, please contact a member of our Payroll team.

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