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Brief alerts - February 2018

Update on non-contractual ‘PILONs’

HMRC have just announced that the new rules on the taxation of non-contractual payments in lieu of notice apply to terminations after 5 April – rather than to payments made after that date.

This interpretation is not set out in published legislation, but HMRC may now find it difficult to argue against its own view!

For more information about how non-contractual PILONs will be taxed, please refer to our article, ‘PILONs and Tax – all change’: https://www.irwinmitchell.com/about-us/newsletters/employment-update/jan18-pilons-and-tax-changes

Employers "sleepwalking into GDPR abyss", new analysis shows

According to a recent report by software technology firm Senzing, 60% of businesses have said that they’re not prepared for GDPR, which comes into force on 25 May 2018. Its analysis indicated that smaller businesses are most at risk, with some choosing to simply ignore GDPR.

The report follows a similar call to action by the Department for Digital, Culture, Media and Sport, after it was revealed that 50% of businesses and charities remained unaware of their obligations under GDPR.

If you are one of these businesses that haven’t yet considered how GDPR will affect you, we have a free 50-minute webinar to help you understand what steps you need to take to continue to process data about your staff.


We also have a list of FAQs about GDPR and HR available here: https://www.irwinmitchell.com/about-us/newsletters/employment-update/nov17-frequently-asked-questions-gdpr-and-hr

Minimum wage: number of workers reporting abuse doubles

The Financial Times has reported a 50% increase in the number of people who reported receiving less than the national minimum wage. The figures showed that in the financial year finishing April 2017, HMRC had received complaints from over 90,000 workers, investigating more than 2,500 businesses, and amassing £10.9m in underpaid wages in the process.

Many businesses are unaware that workers can ask HMRC to investigate their employers for paying less than the NMW. Workers can raise an issue over the phone or by using HMRC’s online notification process. Once a complaint is raised, HMRC will work on the basis that the worker has been underpaid and it’s the employer’s responsibility to prove otherwise.

Employers who fail to pay the NMW (even by mistake) have to repay any underpayment to relevant workers and will also receive penalties of up to 200% of the arrears up to a maximum of £20k per worker. The employer will also be publicly ‘named and shamed’.

As an additional financial penalty, underpayments are calculated using current NMW rates – not those that applied at the time of the underpayment.

Fawcett Society calls for a clampdown on "fake" gender pay gap data

The Fawcett Society has called for a clampdown on "fake" gender pay gap reporting, after several firms reported a "statistically improbable" 50:50 male to female pay gap on the Government site. According to the figures, several companies have a 0% gender pay gap, with others reporting absolute equality, with women accounting for precisely 50% of lower, middle, upper and higher wage earners.

A number of companies have openly admitted to publishing incorrect figures, and the Fawcett Society has called on the Government to do more to provide the "Equality and Human Rights Commission with the power and resources to effectively crack down on businesses who don't comply with the law”.


UK Statutory Sick Pay "inadequate"

According to the Council of Europe, Statutory Sick Pay (SSP) and social protections for jobless and self-employed people in the UK are in breach of legal obligations under European law, and are “manifestly inadequate”.

SSP is paid at a flat rate of £89.35 per week (which will increase to £92.05 from 6 April 2018). It is subject to complex rules. Employees are only entitled to receive SSP when they have been sick for a continuous period of 4 days or more and it is only payable for up to 28 weeks' in any period of incapacity for work.

The findings stated that the UK was “not in conformity” with a number of legal obligations dictated by the European Social Charter, a legally-binding economic and social counterpart to the European Convention on Human Rights.


Government launches shared parental leave campaign after just 2% take-up

Shared Parental Leave was introduced in 2015 and allows working parents to take paid and unpaid leave on a flexible basis following the birth or adoption of a child and, in some cases, to share that leave and pay with their partner.

Take up has been low – the Government recently estimated that less than 2% of individuals who are eligible to take Shared Parental Leave have done so. One reason for this is the flat rate of statutory pay which is currently £140.98 a week (or 90% of average weekly earnings if that is lower).

In an attempt to increase uptake, the Government has launched a new shared parental leave campaign and developed a new website to provide advice to new parents and employers. https://sharedparentalleave.campaign.gov.uk/

£4 billion equal pay claim launched against Tesco

Legal action has been issued against Tesco on behalf of female shop workers who allege that they are receiving approximately £3 less per hour than men working in its distribution centres.

Under the Equality Act 2010, an employee can claim equal pay with a comparator of the opposite sex who is employed in the same employment and performing "like work", "work rated as equivalent" or "work of equal value". In June 2016, an employment tribunal found that lower paid female workers at Tesco’s rival, Asda, could compare themselves to higher-paid men who work in its distribution centres.

If successful, it is estimated that Tesco may have to pay around £4bn.

February 2018

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Melanie Stancliffe