The Department for Business, Energy and Industrial Strategy (BEIS) has launched a National Minimum Wage: consultation on salaried workers and salary sacrifice schemes. 

The consultation seeks views on:

  • Proposed changes to the National Minimum Wage Regulations which relate specifically to salaried hours work and where employers feel National Minimum Wage rules unfairly penalise them without generating any benefit or protection for workers
  • The practical operation of Salary Sacrifice schemes.

Under amendments to section 8 of the Employment Rights Act 1996 it is proposed that an employee's itemised pay statement (normally your payslip) must also contain information regarding the number of hours worked by the employee for which they are being paid, but only in situations where the employee’s pay varies as a consequence of the time worked. Pay statements are already required to how gross and net pay with details of deductions from pay and calculation of holiday pay.

Specific problems in calculating the NMW for salaried workers are that their working hours can vary, the periods for which the NMW is calculated depends on employment start dates and the rules become complicated by overtime and when the employer provides benefits or makes a deduction for the provision of rent or similar benefits. Employers in the hospitality and retail sectors are particularly hit by these issues.

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BEIS Consultation: Salaried hours work and salary sacrifice schemes

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