employees

Health and Safety for SMEs – What you need to know!

MOMENTUM Business Support HR and Recruitment
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Did you know that if you run a business and have five or more employees you are legally required to have a written health and safety policy?

If you are a business owner, here’s the low down on what you need to know …

Preparing a health and safety policy needs to be in three parts

  • A statement of intent from the business demonstrating its commitment to health and safety.
  • Health and safety responsibilities for both the employer and employees.
  • Health and safety arrangements which detail how you protect your employees and others. This includes; information about fire and emergency, first aid arrangements, accident reporting, work activities, welfare arrangements.

Managing the risks in your business

  • A written general risk assessment is another legal requirement if you have five or more employees.
  • The risk assessment needs to identify the risks in your business, who might be harmed and how you control those risks. The findings need to be recorded and reviewed at least annually.
  • Some risks will need to be assessed in greater detail and will therefore need a specific assessment, for example; working with display screen equipment (PCs, laptops etc.), working at height, manual handling (lifting and carrying), running events, handling chemicals, homeworking.

Consulting with your employees

  • Businesses need to make sure they consult with all employees. This needs to include talking and listening about their work activities and the risks involved and providing them with information and training about working safely.
  • Consultation can either be directly with each employee (for a small business) or, via a health and safety representative in larger business.

Information and training

  • Everyone who works for you needs to know how to work safely. They need to have the necessary information and adequate training to complete the tasks.  For example, if one of the tasks is lifting and carrying, employees need to know how it should be done safely and without risk, to prevent injury and ill health.
  • Employees also need to have access to the health and safety law poster or pocket card which outlines health and safety laws and relevant contact details.

Getting it right

  • A business owner needs to appoint someone competent to help meet the necessary health and safety duties. Competency includes skills, knowledge and experience to manage health and safety.  If you are not confident to manage all the requirements in-house you may need some external help or advice.

 

If you would like further information about how to manage health and safety in your business please call 01903 688789 or email makeithappen@mbsmih.com and we’d be happy to help.

It’s A Minefield – And You’re Probably Already In It!

MOMENTUM Business Support HR and Recruitment
It’s A Minefield - And You’re Probably Already In It! Image

If you haven’t already or aren’t aware yet, as a growing SME you should start planning now for the most significant employment law developments.

National Living Wage
This is the increased national minimum wage for workers aged 25 and over. The initial rate was introduced at the beginning of April 2016 and is £7.20 per hour (50p more than the previous rate). You need to be aware that the National Living Wage will increase every year, with the aim of it being 60% of median earnings, and it’s expected to be £9 by 2020!

This development is set to have a major impact on the retail, social care and hospitality sectors, and businesses are already looking at ways to mitigate the cost. Many SMEs are reviewing other benefits such as bonuses, discretionary benefits, lunch vouchers, and implementing staff cuts etc.

Many staff paid at or near the minimum wage will also have lost out financially as a result of changes to tax credits, so securing their agreement to your bonus cuts may be tricky. Ensure you consider carefully how to implement any such changes – staying the right side of the law.

Pensions Auto-Enrolment
Although auto-enrolment has been in force for several years now, its phased introduction means that many smaller employers will only begin contending with it in 2016 and 2017. You can find out your staging date (the date by which you need to have the auto-enrolment scheme up and running) by checking on the Pensions Regulator’s website here but keep in mind that it takes a few months to select a scheme, get it set up and put the employee paperwork in place.

In most cases businesses will need to start planning the process six months before the staging date. In particular, you need to determine which of your staff will need to be automatically enrolled and whether the you want to use a ‘postponement period’ so new staff are not automatically enrolled during their first three months of employment. Initially, the minimum employer contribution will be 1% of ‘qualifying earnings’, but this will also rise over time to 3%.

Zero Hours Contracts
These contracts continue to be controversial but they can be a vital tool to help smaller businesses cope with fluctuating demand. In 2015 new legislation was introduced by the Government stopping the use of exclusivity clauses (e.g. banning an individual from taking on other work) in Zero Hours Contracts. However, the legislation did not give staff any follow up if they were dismissed or punished for taking on other work. The government has now tried to address this and new regulations came into force on 11 January 2016 giving ‘zero hours’ employees the right to bring employment claims if they are dismissed or subjected to a detriment for breaching an exclusivity clause. This looks set to be a developing area of law…

Holiday Pay
Calculating holiday pay ought to be simple but 2014 and 2015 proved this certainly is not the case. Various cases are still working their way through the appeal system in relation to whether voluntary overtime and commission payments need to be included in holiday pay and how this should be calculated. Be sure to keep a careful eye on this and ensure you understand your legal obligations.

Statutory Pay Rates
One minor piece of good news for businesses is that Statutory Maternity Pay will not be increased this year and will remain at its current rate of £139.58 per week (paid for 33 weeks after the employee has received six weeks’ pay at 90 per cent of her weekly earnings).

As an SME, you should also be mindful that reporting requirements on modern slavery (already in force) and the gender pay gap (due later this year), which currently apply to larger businesses, may affect you if you have supplier contracts with bigger organisations, and tyou should expect these issues to play an increasing role in procurement and contract negotiations.

Modern Slavery
The Modern Slavery Act 2015 (section 54) will require some commercial organisations to publish an annual anti-slavery and human trafficking statement. Businesses may need to carry out significant auditing of their global supply chains to fulfil this obligation, and there is the potential to carefully consider introducing policies and practices on the issues involved, as well as implementing training and awareness.

Gender Pay Gap
This is a measure of the difference between the average earnings of men and women within an organisation based on a comparison of what men and women get paid for doing the same job. But there are many different ways of measuring the gender pay gap, and currently no single recognised method. How it is measured can make a big difference to the answer.

The Office of National Statistics measures the gender pay gap by comparing the median hourly earnings of men and women, excluding overtime. The median calculation reflects the mid-point of a range of earnings, and using this method is said to be preferable because there is less distortion by very high or very low earnings than when using a mean average, for example.
Comparisons are usually made between hourly rates as this takes account of the fact that statistically men work more hours on average than women. For the same reason, it is said that bonus and overtime payments should be excluded, although recent reports suggest that bonus payments are likely to be included in the calculation when the regulations are published.

HMRC New Employee Form
The HMRC have published a new starter checklist for new employees starting with organisations who don’t have a P45. This includes information required from the new employee to set them up with the correct tax code and starter declaration on the payroll.
Usually most of this information comes from the employee’s P45, but they’ll have to fill in a ‘new starter checklist’ (which replaced the P46 form) if they don’t have a recent P45.
Information that will be needed is:
•    Date of Birth
•    Gender
•    Full Address
•    Start Date

From the employee’s P45;
•    Full name
•    Leaving date from their last job
•    Total pay and tax paid to date for the current tax year
•    Student loan deduction status
•    National Insurance number
•    Existing tax code
This information must be kept in the payroll records for the current year and the 3 following tax years.
If the employee doesn’t have a P45 ask them for this information, or if they left their last job before 6 April 2015.
Important: The P46 form is no longer used.
Get the information by asking your new employee to complete HMRC’s new starter checklist. They’ll need to save it on their computer and open and complete it in Adobe Reader version 9.0 or later. It can be found here.
If you need support with any of the points raised here or have any questions that you’d like answered, please get in touch via phone 01903 688789 or email makeithappen@mbsmih.com, we’re always happy to help.

Are You Ready For The National Living Wage?

MOMENTUM Business Support HR and Recruitment
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National Living Wage and National Minimum Wage.

It’s not long until the 1st of April 2016, when the government will introduce the new mandatory National Living Wage for workers aged 25 and above – an increase of 50p per hour on the current Minimum Wage (£6.70 per hour) for this age group to £7.20 per hour.

The National Minimum Wage of £6.70 will continue to apply for those aged 21 to 24, with the premium added only for those aged 25 and over.

It is vitally important that you audit and review any employee salaries that may fall into this new bracket to ensure compliance before the implementation date.

The government will impose fines and criminal prosecutions against any employers found not to be paying legal minimum wages.

The government has announced a package of measures to enforce the National Minimum Wage and National Living Wage from its introduction in April. While the overall maximum penalty for underpayment of the wage will stay the same at £20,000 per worker, new measures include doubling the penalties for non-payment of the statutory rates from 100% to 200% of the arrears (halved if employers pay within 14 days), and introducing a new team of HMRC Compliance Officers to investigate the most serious cases and bring criminal prosecutions against employers for deliberate non-compliance.

Business Secretary Sajid Javid said there is “no excuse for employers flouting minimum wage rules” and the new measures “will ensure those who do try and cheat staff out of pay will feel the full force of the law”.

The government has said it will improve the compliance guidance available to employers. In the meantime, if you have any questions or would like any support or advice we’re here to help: makeithappen@mbsmih.com  01903 688789

How To Use Employee Handbooks To Minimise Workplace Risk

MOMENTUM Business Support HR and Recruitment
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 – And why failing to keep them updated could become a liability rather than an asset

 

Running a modern people-led business requires the management of risks arising from employees. Having a handbook in place, which is tailored and up-to-date, is one way of helping to manage those risks.

An organisation’s people are its biggest risk and its greatest asset. The banking crisis, for example, is widely accepted to have come about as the result of bad behaviour on the part of City workers. The legal framework for the financial markets has become increasingly onerous as a result, as regulators have tried to put in place a structure to reduce human risk and prevent another financial catastrophe.

It is just as vital in other sectors that employers make clear the parameters within which employees should work, and one important part of this involves putting down in writing what behaviour is and is not acceptable.

Such guidelines are not usually included in employment contracts. This is because it is generally difficult to change and update the terms of a contract, and an employer would not generally want to leave itself open to contractual claims on the basis of detailed guidelines. A staff handbook can play an important role here, as one of its main functions is to set down rules within which staff should operate. Handbooks are intended to shape employees’ behaviour to help improve conduct in the workplace.

A handbook can also help show an employer’s practices are consistent with employment legislation and can be used to help justify disciplinary decisions. They can also be important for backing up employers wishing to take action against recalcitrant employees.

Employers may find it difficult to deal effectively with misconduct where there is no handbook in place. For instance, there have been examples of employers having to make large cash settlements to get rid of employees who have clearly acted inappropriately at work (e.g. by taking unauthorised absences, or by drinking or taking drugs) because the organisation was not able to demonstrate it had appropriate policies in place to stop such behaviour.

So, what should a basic staff handbook contain? It needs to cover a number of standard topics including grievance and disciplinary procedures and, for example, contain an anti-harassment and bullying policy. Depending on the sector, an employer may wish to include other policies. Some organisations, may choose to have a ‘relationship policy’ requiring employees who become romantically involved to disclose this to an HR manager or superior. This can be particularly important in financial institutions where the unchecked flow of information between staff could lead to conflicts of interest.

Handbooks must be kept up-to-date both to remain practically useful and to avoid becoming inconsistent with official guidance, legislation and case law. The Acas code of practice on discipline and grievance, for example, was updated early last year and in January it published a new guide, Disability discrimination: key points for the workplace

In a recent European Court of Human Rights case, Barbulescu v Romania, a company was found not to have breached the privacy rights of an employee by monitoring his Yahoo Messenger account when it suspected him of using the account for private purposes. It appears to have been significant that the employer had a clear policy against private use of the company’s resources. The decision may well lead to other organisations updating their policies and handbooks.

An out-of-date handbook is a liability rather than an asset, not least because it may be used in legal proceedings as evidence that the employer’s practices are outmoded or unlawful. In a recent employment tribunal case, Stimpson v Citigroup, a City trader was sacked after having been accused of sharing confidential client information. The employment tribunal accepted his dismissal was unfair, even though the bank had policies which appeared to outlaw what he had done.

The case demonstrates that handbooks and policies are not the end of the story. Employment tribunals have been reluctant to accept, on face value, that breaches of written policies automatically provide sufficient justification for disciplinary action or dismissal. Employers need to ensure their contents are communicated to employees effectively.

For more information and guidance on how to create a handbook, please contact us on 01903 688789 or email us via makeithappen@mbsmih.com.

HR – Are your staff entitled to BACKPAY?

MOMENTUM Business Support HR and Recruitment
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Based on a real case we are currently managing. Names, business details and terms have all been changed for privacy.

July 2015
Summer owns a Beauty Salon and employs 8 employees, all of whom are paid a basic hourly rate plus commission (based upon an individual’s sales). Summer is happy as they are good workers and she wants them to keep working for her.

The Background

She employs:
– Tracey (age 17), a trainee on a government apprenticeship scheme. She pays her £2.50 per hour working a minimum of 30 hours per week.
– Melanie (age 19), in the second year of her apprenticeship. She works a minimum of 30 hours a week and is paid £2.73 per hour. She queries this amount with Summer as her employer, but Summer insists this is the correct payment for an apprentice.
– Linda (a 16 year old school leaver) started working at the salon in June 2015, but will not start her apprenticeship at college until September. As Linda is not starting her apprenticeship until September, Summer has offered her a normal employment contract and age-related National Minimum Wage of £3.79 per hour from July to the end of August. She will then revert to the rate of £2.73 per hour when Linda starts her apprenticeship.

(In the meantime – Summer becomes unclear of Linda’s correct entitlement after a colleague said that she should pay Linda £2.73 from the date she started her employment, even though she has started working before her college training commences.)

– Kirsty (age 24) has been working at the Salon the longest and is paid an hourly rate of £6.10. She is always very busy with repeat customers and generates lots of business for the salon. She earns the most commission every month.

Summer also employs 3 other Beauticians and a Salon Manager.

The Facts

Summer should know:
•‘cash in hand’ and commission payments should be treated as wages
•these payments should be included when working out if the National Minimum Wage has been met and paid correctly, and included for Tax and National Insurance calculations as appropriate

Summer is not paying Tracey the National Minimum Wage.

Summer should know:
•the current minimum wage rate for an apprentice is £3.30 per hour
•this rate applies to apprentices aged 16 to 18, and those aged 19 or over who are in the first year of their apprenticeship
•a worker being new and building experience won’t mean they aren’t entitled to National Minimum Wage.

Summer is not paying Melanie the correct National Minimum Wage.

Summer should know:
•someone who has completed their first year of apprenticeship, and is over 19, should be paid the minimum wage rate for 19-year-olds, which is currently to £5.30 per hour

Summer is paying Linda correct National Minimum Wage.

Summer should know:
•if a normal employment contract is issued from the start of employment, the worker is entitled to the age-related National Minimum Wage from the start of their employment
•the worker is entitled to the apprenticeship rate for the period when the apprenticeship commences
•if she issues a contract of apprenticeship from the start of employment, the employee is entitled to the apprenticeship rate from the start of the arrangement.

Summer is paying Kirsty the National Minimum Wage.

Kirsty is paid £6.10 per hour basic salary plus her commission every month, she earns £8.00 per hour, which is above the National minimum wage for her age; £6.70 per hour.

The four other employees are also not paid the current minimum wage.

The Outcome

A number of the employees are very unhappy when they find out they are not being paid the minimum wage. They are owed a large amount of back pay which is very costly to Summer.

Summer had to pay large amounts of back pay to reimburse her team. She was also fined and named by the government publicly for failing to pay the minimum wage.

Summer was also contacted by a number of employees who historically worked for her, asking if they were owed any back pay.

Summer did not have up to date Contracts of Employment for her employees or a Company Handbook.

Employers have a legal obligation to pay the minimum wage to all their employees and also must give employees a ‘written statement of employment particulars’ (contract), if their employment contract lasts at least 1 month or more.

All businesses with employees should have up to date Employment Contracts in place and an Employee Handbook. An understandable, readily accessible set of policies helps ensure that employees are treated fairly and equally. Formally writing down your business’s policies and procedures and providing clear guidelines means you will spend less time answering questions and explaining the basic rules of your company. It will also protect you as a business from a situation such as this happening to you and ensure you comply with the latest employment legislation.

National Minimum Wage
•From 1st October 2015, the national minimum wage increased: •From £6.50 to £6.70 per hour for workers aged over 21
•From £2.73 to £3.30 per hour for apprentices
•The rates for 18-20 year olds increased from £5.13 to £5.30 an hour and 16-17 year olds from £3.79 to £3.87

•In February 2015 the government named 70 employers that failed to pay minimum wage
•The worst offender was a care provider in East Midlands, Crossroads, which owed £37,500 to 184 workers
•About 100 other cases in the care sector are still being investigated
•All 160 employers named face financial penalties as well as suffering reputational damage
•In the summer Budget the Chancellor revealed plans for a “national living wage”
•The national living wage (NLW) will apply form 1 April 2016 and be payable to workers aged over 25 and will replace the national minimum wage (NMW) for this group of workers
•Initially the NLW will be payable at the rate of £7.20 per hour.

If you’re worried this may affect you, or you would like to talk to us about any other HR related issues, give us a call on 01903 688789 or send us an email to makeithappen@mbsmih.com.

Our HR packages are extremely flexible and cover everything you could need. We offer a fixed fee retainer, can work with you to address one-off issues or on a project by project basis.

We can provide all of the legal documentation required for managing people and equip you with the necessary skills for all your HR challenges. We will work with you to help you structure your organisation with the right skills and capabilities in line with your desired business strategies.