HR REWARD AND BENEFITS
A threadthrough the legal labyrinth
Employment law is complex at the best of times, but when tax, benefits, fuel efficiency and parental leave come into play, HR departments can find themselves facing fresh hurdles in their bid to give staff a competitive offering. HARMAJINDER HAYRE guides us through the labyrinth of legislation around employee benefits and reward, current and future
National Minimum Wage
The Low Pay Commission launched a consultation in June, on the National Minimum Wage (NMW). The consultation ends this month (September 2012) and recommendations made on the rates of NMW will be implemented in October 2013. The Low Pay Commission is asking for views from employers on: the level and impact of the NMW; its application in respect of young people, apprentices and interns; its application to salaried hours and the provisions in relation to accommodation offset. A report on the NMW has also been published, Minimum
Wage: Maximum Impact, which recommends that workers aged over either 25 or 30 should be paid a higher rate of NMW, as should workers in London and the South East. Given economic uncertainty, austerity measures for years to
come, and the 11% rise in the NMW as of October 2012, many employers are not going to have an appetite for a further increase in 2013. Employers will need to consider what effect an increase in NMW would have on their business and whether it would allow them to continue to operate effectively and remain sustainable. The proposals in relation to workers aged 25 or 30 and those in the London area being paid more are likely to lead to further cost pressures. Employers need to start planning now for potential recruitment in 2013.
Pensions and auto-enrolment
Employers will soon have to provide pension arrangements for employees to be automatically enrolled into. The largest companies roll out this scheme in October 2012, with smaller fi rms following, over a fi ve-year period. Employers will also be required to contribute to these pension arrangements. Employers will need to check the date their organisation is
required to enrol by – dependent on the number of employees. This will be communicated to organisations; the provisional date can be checked on the Pension Regulator’s website. The next step will be to carry out an initial assessment of the
workforce. The rules on auto-enrolment apply to all workers and not just employees aged between 22 and state pension age, working or usually working within the UK and earning above £8,105 per annum. The contract of service of all eligible workers will need to be amended to refl ect this entitlement. When the employer is aware of how many individuals are entitled to be automatically enrolled, it must select a qualifying pension scheme. Once this has been done, the organisation must register with
the Pensions Regulator and be aware of the importance of keeping records for the duration of the scheme. The obligation to comply with the auto-enrolment rules sits squarely with employers. Non-compliance could lead to painful penalties.
The obligation to comply with the auto- enrolment rules sits squarely with employers
hrmagazine.co.uk HR Supplement September 2012 29
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