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Industrial action threatens upcoming BBC PromsThe threat of industrial action over pay and pensions could force the cancellation of one of the biggest classical music concerts in the country.
Last night of the Proms, the BBC’s annual classical music festival which started in July, is likely to be hit by strike action following anger at senior executive pay and proposals to change the BBC’s pension scheme.
The popular Proms season is seen as a suitable casualty to highlight the storm.
The musicians’ union, BECTU, said there is a real possibility that viewers will be presented with a blank screen and no one in the Albert Hall other than an angry audience.
Union posters show BBC executives with their pockets full of cash, which reflects the growing resentment between
the top and rank-and-file staff at the organisation.
A BBC staff member told The Guardian, ‘The senior directors have no idea about the depth of feeling.’
The BBC’s director general, Mark Thompson, has tried to overcome the mounting unrest by agreeing to senior executives
volunteering to work for free one month each year.
Moves such as this, however, have been nothing more than gimmicky.
Mary Honeyball, London MEP spokesperson on the Committee for Culture and Education in the European Parliament, told Payroll World: ‘It’s patronising, to say the least, to suggest that senior executives will work for one month for free.
It sends a rather cynical message – that they can afford to work without being paid. It misses the point entirely and does not address the issue, which is that many loyal BBC employees will have their pensions significantly altered without their consent.
This is the real issue and the BBC must address this, rather than being concerned with gimmicky PR moves.’
02/09/10Late salary would affect 50% of employeesSome 50% of employees would struggle to meet their financial commitments if their salary was paid late, according
to research from the Institute of Payroll Professionals (IPP).
Elaine Gibson, Senior Policy Officer for the IPP, said: ‘In some circumstances, economic resources are so tight that a
delayed pay cheque could have detrimental effects.
Just a few days, let alone one week, may prevent employees in fulfilling their financial obligations, including paying
for basic necessities such as mortgage or rent payments, as well as food and utility bills.
Ms Gibson urged employers to ensure they have a contingency plan in place so they are able to make immediate payments to an employee if they are about to incur a bank charge as a result of not being paid on time.
‘The employer may be able to assist by reimbursing the cost of the charges.
Most employers should have a contingency in place,’ she said.
02/09/10Equal pay threatens to spark coalition Government conflictEqual pay audits could emerge as a point of conflict for the new Conservative-Liberal Democrat Government, given the contrasting stances taken by the coalition partners.
The Proactive Group of employment lawyers advised that the bulk of the new Equality Act – passed into law in the last days of the Labour Government – is likely to come into force. But it added: ‘The Conservatives confirmed prior to the election that they would not bring into force the act’s provisions relating to:
The socio-economic duty on public sector authorities;
Positive action in the recruitment process; and
Gender pay reporting.
It added: ‘Unlike the Tories, the Liberal Democrats are keen on compulsory equal pay audits, so there may be an issue in terms of how these positions can be reconciled.’
Equality now falls under the Home Office. Conservative Theresa May is Home Secretary, and Liberal Democrat Lynne Featherstone, a campaigner for equal rights, is Equality Minister. She wrote in her blog: ‘For two years as Shadow Equalities Spokesperson – through the Equality Bill, and through speeches to groups and our conference policy papers on women and youth – it has always been about what the Lib Dems would do about equality if in government. Blimey, we are! Now I can deliver it – well some of it.
‘Equalities was not in that first-tier agreement released by the Lib Dems and Conservatives prior to coalition, but it will be part of the second-tier agreement, I believe.’
The Emergency Budget, to be held on 22 June, is not likely to feature changes to income tax and National Insurance this year. The new Government aims to first reduce the public sector deficit, but an increase in VAT is more likely than any income tax rises. It also announced only a partial implementation of the planned 1% hike in National Insurance Contributions for next year.
Pressure to slash the deficit has increased sharply in the past month with the growing crisis of sovereign debt.
British banks are exposed to significant levels of European Government debt, including Greece. In the event of a default they may need further large-scale assistance from the UK Government to prevent collapse. The Government is likely to be forced into much higher tax increases and spending cuts than planned.
There has been no announcement from the coalition Government on the pre-election promise by the Conservatives to pilot an alternative to the PAYE system through the BACS infrastructure.
03/06/2010Public Sector pay review headed by Will HuttonThe Observer journalist and executive vice chair of think tank The Work Foundation, Will Hutton, has been appointed by the new Conservative-Liberal Democrat coalition Government to head up a review board of public pay. Mr Hutton is expected to conduct a review on how to limit the pay gap in the public sector and at what period such a cap could be brought in. He will be supported in his role by managing director of The Work Foundation, Stephen Bevan, who is a public sector pay specialist, along with Philippe Schneider, who is an independent research consultant.
The unpaid role will see him review the level of remuneration needed to retain, attract and motivate staff. The review will also look at staff who are covered by the senior salaries review body, non-departmental bodies and managers in local government and the NHS.
The move follows Prime Minister David Cameron’s announcement that the Government will scrap bonuses for some 2,000 senior civil servants and NHS managers in an effort to crack down on the public sector wages.
Prior to being elected, the Conservatives had promised to establish a fair pay review, which would ensure that senior managers in any department would not receive more than 20 times the salary of the lowest paid person in the organisation. The review body will be based in the Treasury and will report its findings in December.
03/06/2010Met Police commissioner calls for bonuses to be scrappedPolice bonus schemes should be scrapped, according to Met Police commissioner Sir Paul Stephenson. Senior police officers, including chief constables, can receive bonuses of up to £30,000 a year for meeting national Home Office targets.
But the payments would be difficult to remove, according the Police Federation of England and Wales. Paul McKeever, chair of the Police Federation of England and Wales, said bonus payments have always been controversial. He said: ‘The time is right for a review of all types of bonus, for every level of officer… they have not been working well for some time. The implementation is patchy as it is down to individual senior officers.’
Met chief Sir Paul Stephenson is paid £250,000 but has turned down almost £100,000 worth of performance-related bonuses since 2005. He told the Daily Telegraph that paying officers bonuses for anything from performing unpleasant tasks to showing a willingness to learn, raised concerns over the ‘operational independence’ of police officers.
Sir Paul also questioned ‘whether police officers should receive a bonus for doing their jobs’. He added: ‘I am disappointed we still have bonus payments in policing… they should never have been there in the first place.’
Last month, a group of officers met with new home secretary Theresa May and told her the payment of bonuses had been imposed on police forces, but private sector methods of remuneration and reward were not appropriate for the public sector.
Figures for 2008 reveal that Norfolk Police paid bonuses of £25,000 to senior officers, while Devon and Cornwall paid a total of £20,000, and Hertfordshire £13,300. Last year, the total bill for police bonuses came to some £37m.
Payments were originally implemented to cover for lost allowances, such as clothing payments for detectives and subsidies for firearms officers.
03/06/2010Charities flout law on National Minimum WageCharities have come under fire for not paying the National Minimum Wage (NMW) to workers who are required to ‘sleep over’ in roles that have a residential element.
Trade union Unite, which is in the process of alerting all its members to what it calls ‘abuses’, said many of the workers who worked in this way were not being remunerated, yet were still at their employer’s disposal.
Rachel Maskell, national officer at Unite, said: ’Members who are working such shifts are entitled to the NMW – £5.80 an hour. If the employer is not paying the NMW, a claim for unlawful deduction of wages can be brought.’
03/06/2010Pay run suspended at Cumbria as universities face cash crisisThe University of Cumbria, which opened in 2007, is struggling to meet its payroll run. The situation is so acute it was forced to approach HEFCE (Higher Education Funding Council for England) for a cash advance in order to help meet its salary bill.
In an interview for Radio 4’s The Report, which aired last month, it was revealed that the university has a debt of £30m. The university’s union rep and professor of philosophy, Dr Curnow, told the programme’s reporter, James Silver, that the university’s business model was problematic from the start.
‘The problem we’re faced with now is that we’re being told we’re the wrong kind of university – too many staff, too many campuses and courses. What I keep saying is: “But you knew that three years ago. Why were we not told then we had too many sites?”’
There is concern that the problem is spreading to more establishments. The University and College Union’s general secretary, Sally Hunt, said: ‘I am worried we are seeing a sign of things to come. Cuts cannot be made without consequences and there is a real danger of more universities facing financial meltdown.
‘Unless these savage cuts are reversed, we face the very real prospect of many universities being forced to the wall, over 14,000 staff losing their jobs, and some of the biggest class sizes in the world.’
At Cumbria, when Dr Curnow looked at the company’s books, it appeared they had run out of money. Despite this the university’s vice chancellor, Dr Peter McCaffery, insisted that after receiving help from HEFCE it had now put in place a ‘credible business plan’.
An HEFCE statement revealed it had been offering a higher level of strategic support since October 2009, when ‘new management and financial information indicated deterioration in the university’s financial position’.
It went on: ‘We have supported the university in developing its new long-term, sustainable business plan.’ Mr Silver’s investigation also revealed that the university is just one of several institutions on the HEFCE’s watch list, but the council has refused to say which other institutions it has concerns over.
Cumbria opened in August 2007, but earlier this year confirmed that it was closing its Ambleside campus in an effort to save money. The university had also decided to scrap plans to build a new £70m headquarters in Carlisle, which would see some 200 jobs axed.
04/05/2010Australian health payroll in chaosAn Australian health payroll system has hit the headlines after a new payroll system which was not implemented properly resulted in thousands of workers being underpaid.
And there is little hope of it being rectified in the immediate future after the Australian Services Union (ASU), which represents the staff, admitted it will take several months to rectify.
Although the salaries were due to go into people’s banks as planned last month, the state government said it was not expecting a perfect payroll run, despite running tests to minimise mistakes.
ASU spokeswoman Julie Bignell is concerned about the length of time it has taken to sort the problems.
‘I understand prioritisation is important – and certainly the big stuff needs to be done quickly, and I can see some movement on that – but I think people probably still don’t know what the scope of this job is,’ she said.
Queensland Health hopes to have the payroll problems resolved within a month’s time.
04/05/2010Flight attendants in nude protest over payA group of flight attendants in Spain, who are owed up to nine months of wages, have posed nude for a calendar in an effort to highlight their plight. The flight attendants’ naked protest came about after their Spanish airline, Air Comet, was grounded in December. The airline got into trouble after the High Court intervened and impounded nine of its aircraft.
It was also stopped from selling tickets following a request from a German bank, which sued the airline for not meeting the terms of the payment for its leased aircraft.
Attendant Adriana Ricardo, who appears in the calendar in high heels and a bikini, told Reuters: ‘We are just demanding what’s ours. We are each owed eight or nine months of unpaid salary.’
She added: ‘I think it’s a different and elegant way of highlighting our plight.’
Over 1,000 calendars featuring nine women in their flight caps, gloves and heels have gone on sale for £13.
In France, a group of some 50 factory workers resorted to militant behaviour last month, after the factory in which they work faced closure.
The French workers threatened to blow up the plant unless they receive a better redundancy package, reportedly positioning petrol bombs near a gas tank. The workers said they would ignite the five-metre long gas tank at the entrance to the Sodimatex car parts plant near Paris if their demands were not met.
France has suffered from an unusually high unemployment rate – at 10% it is the highest level for a decade. Over the past year, there have been cases of boss-napping and one other case of a threat to blow up a factory over job insecurity and pay.
04/05/2010Darling orders banker pay disclosureHR departments in the City will have to draw up more comprehensive public details on pay, following an announcement by the Chancellor in the Budget.
The announcement follows the Walker Review, which highlighted incentives in the bonus system in banks, especially investment banks, that encouraged some to engage in high-risk activity.
‘There should be enhanced disclosure of remuneration in the banking sector,’ said Mr Darling. ‘After the [Finance] Bill gains Royal Assent, the Government will formally consult on those regulations. As part of that process, and given the key role that shareholders should play in managing remuneration contracts, the Government will consult on whether further practical measures can be identified to facilitate the consent of shareholders in agreeing remuneration in the financial services sector.’
The announcement will mean a sharply raised profile for the compensation and benefits function, as it will have to prepare more reports for the remuneration committee to consider. It also heightens the need for payroll departments to have systems that produce accurate data.
The Walker Review included the following proposals:
_ More power for remuneration committees to scrutinise firm-wide pay;
_ Remuneration committee to oversee pay of high-paid execs not on the board;
_ Significant deferred element in bonus schemes for all high-paid execs; and
_ Increased disclosure about pay of high-paid execs.
Although there is likely to be a change of Government following the General Election, the Conservatives are unlikely to repeal a measure that clamps down on City pay. While the Conservatives have generally been supportive of the financial services industry, their leader David Cameron has said he plans to proceed with an extra tax on banks, even if other countries do not.
Minimum wage rises 2.2%
There will be an increase in the National Minimum Wage, though slightly lower than the rate of inflation, this year.
In last month’s Budget, the Chancellor said that, on 1 October 2010, the adult rate of National Minimum Wage would rise from £5.80 per hour to £5.93, a rise of 2.2%. The latest inflation figures show an annual rate of 3%.
Increases in the pay floor have been muted, as low inflation and a desire to maintain employability reduce the scope for increases. But some trade unionists called for a bigger increase.
Employers have expressed concern at the impact of minimum wage increases, but the CBI welcomed the modest rise. John Cridland, deputy director-general of the CBI, said: ‘This moderate increase recognises that businesses are struggling and helps protect jobs at a time of rising unemployment. The inflationbusting rise… unions wanted would have hit firms hard and put many… on the dole.’
Some Conservatives have called for regional reductions in the minimum wage, but the party has dropped its previous opposition to a statutory minimum wage.Pre-Election Budget calls for bank accounts for all
Proposal from Labour Chancellor is consistent with Conservatives’ plans for centralised PAYE systemUp to one million more people will have access to bank accounts, Chancellor of the Exchequer Alistair Darling announced in the pre-Election Budget. The measure ‘guarantees bank accounts for all and combats financial exclusion’, he said.
In a speech designed to delineate the division between Labour and the Conservatives before the General Election, the proposal ironically fits with the opposition’s idea to switch the PAYE system away from employers to banking.
Under the Tories’ plan, more individuals would have to have a bank account in order to have income tax and National Insurance Contributions deducted.
There was relief for busy payroll managers when he announced there would be no further changes to income tax or National Insurance. A new top rate of 50% tax is due to come in this month, and higher NICs from next year.
A second Budget in 2010 is likely if there is a change of Government in next month’s General Election. At last autumn’s Payroll World conference, Shadow Treasury Minister David Gauke said the Conservatives ‘didn’t like’ this higher top rate, but that reducing the deficit would take priority over reducing higher earners’ income tax.
The Chancellor skirted around the implications of the public deficit, set to be around £167bn – some £11bn less than initially expected, but still a peace-time record in terms of proportion of GDP.
Mr Darling said the UK economy was emerging from the deepest global recession in over 60 years, and that UK GDP contraction was 6% from peak to trough. But he claimed ‘the right calls were made’ and said the recession has ‘not turned into a depression’.
There were many measures aimed at boosting employment. The Government is considering ending the default retirement age, despite supporting a recent court case that upheld the right of employers to set an age at which to retire.
Mr Darling also pledged that older workers will have more opportunities to work while receiving benefits, and that no one aged under 24 should be out of work for six months without being offered a job.Limited immunity for firms that issue pay gap reportsEmployers that volunteer to analyse and report publicly their gender pay gaps will receive only limited immunity from investigation, the Equalities & Human Rights Commission announced.
The Commission hopes to encourage businesses to adopt voluntary measures to analyse and make public their gender pay gaps. Its figures reveal that half of all employers view reducing pay discrimination as a high priority, and more than half of employers (57%) are analysing or planning to analyse their gender pay gap.
However, only 9% of employers currently report pay gap information to staff outside of the human resource team. And one in five employers actively discourage or forbid discussion of employees’ pay.
Trevor Phillips, chair of the Equality and Human Rights Commission said: ‘Transparency is really the first step to addressing the gender pay gap. If an employer doesn’t look at their own gender pay gap, how do they address it?’
But he added that there would only be partial immunity for those volunteering information: ‘Those that take up these measures will receive some immunity from our investigative powers. I hope this incentive, combined with the goodwill and commitment shown by our partners so far, means that we can deliver high levels of participation on a purely voluntary basis, ensuring that gender pay transparency will become normal business practice.’
Last month employers groups and the Commission failed to reach agreement on an arrangement for reporting gender pay gaps. The CBI, British Chambers of Commerce and manufacturing employers group the EEF argued that the Commission’s proposals were ‘too narrow and prescriptive’, the Financial Times reported.
They blamed Government ministers for interfering. In the absence of an agreement, annual reporting of men’s and women’s pay is due to become a requirement by 2013. Equalities Minister Harriet Harman has pushed strongly for more transparency on gender-related patterns of pay.
01/02/10Portsmouth FC could be in breach of employment lawPortsmouth Football Club, which has failed to pay its players on time for the third time, could be breaching employment legislation and face penalties from HM Revenue & Customs, a leading payroll adviser has warned.
Elaine Gibbons, independent payroll specialist, told Payroll World: ‘If their contract stipulates they will be paid on a specific day and they are not, then HMRC could consider this to be a non or late payment of PAYE. Employers need to be aware of this because from April 2010 HMRC will impose a new penalty regime on those who make late or non payments for PAYE.’
Ms Gibbons offered advice to payroll managers who may face such a situation during their career: ‘First I’d suggest writing to the employees affected explaining exactly what this will mean for them.
I would then call the tax office and discuss it openly with them and ask for their assistance to mitigate the penalty.’
She added: ‘If players incur bank charges as a result of not being able to meet financial obligations then the organisation may well have to pay for this.’
The club has been served with a winding up order by HMRC.
01/02/10Tories plan to curb mandatory pay auditsThe Conservative Party is scheduled to cut the planned mandatory gender pay audits that appear in the Equality Bill, according to a leading HR magazine.
Talking to Personnel Today, Shadow Minister for Women Theresa May MP said she would prefer to see mandatory reporting only for those employers that have been found guilty of gender discrimination following an employment tribunal.
The current proposal within the Equality Bill states that the Government will enforce mandatory pay audits from 2013 for any organisation that does not voluntarily publish the information before this date.
Ms May did not dismiss the bill in its entirety and rebuked solicitor general Vera Baird, who has stated previously that she feared the Equality Bill would not become law if the Tories came to power.
Ms May said: ’The reason why we have been broadly supportive is because we think it is very sensible to bring all equalities legislation into one act – because there’s just such a myriad of different legislations, acts of Parliament and regulations – and we are broadly supportive of that concept.’
However, talking at a fringe event on women in the workplace at last month’s Conservative Party Conference in Manchester, Ms May insisted that mandatory pay audits were not the way forward.
She said: ‘We think companies found guilty at tribunals of discriminatory practices should have to do a mandatory pay audit.’
03/11/09NHS manager salary three times averageTop NHS managers received a pay rise three times higher than the average for the rest of the public sector, an employment research body has found.
The news emerged last month as the Conservatives proposed a pay freeze on public sector workers if they are elected in the coming general election.
The average pay increase for trust directors was 6.4% in 2008 – significantly more than the 2.2% rise received by nurses. It was also a vast increase on the Government’s target of 2% for public sector workers overall.
The report also revealed that the salaries of foundation trust executives rose by an average of 7.6%. The median salary for nonfoundation trust executives was more than £24,000 lower.
Steve Tatton, editor of the NHS Boardroom Pay Report 2009, said: ’In the current climate, the remuneration of NHS directors, like any top executives working in the public sector, is subject to intense public scrutiny, particularly when unease about the widening gap between senior executives and the rest of the workforce is growing in both the public and private sectors.
‘It is argued that the reorganisation of the NHS has put boards under increased pressure, which is driving above average pay rises, with salaries increasing faster for executives within newly established foundation trusts. Many PCTs view the existing pay frame as restrictive and are increasingly breaching the salary guidelines.’
03/11/09Temps face wait for equal payOver 1,000,000 agency workers will have to wait two years before they are liable to receive the same rights as their permanently employed colleagues.
The decision, announced by Business Minister Pat McFadden, was made ‘to give recruiters and their clients time to prepare and plan’.
However, postponement of the implementation to October 2011 has angered some groups. Brendan Barber, general secretary of the TUC, said: ‘The Government is right to introduce new rights for agency workers, but it is extremely disappointing that temps will have to wait so long for these rights to come into effect. Agency workers are even more in need of protection during a recession.
Vulnerable workers are always the first to suffer when times are hard.’ The TUC worked alongside the CBI last year to broker the agreement to extend the right to the same pay, holidays and basic conditions as permanent staff to agency workers that have been in a job for 12 weeks or more.
03/11/09Agency workers secure £125,000 in unpaid wagesFigures released last month show that the Government has won back more than £125,000 in unpaid wages for agency workers since April this year.
The move was a result of the Employment Agency Standards Inspectorate receiving increased powers and doubling in size. The outcome has meant that the agency won twice as much money for agency workers than in the whole of the previous year.
In June, inspectors managed to win back over £17,000 for four engineers in West Sussex, £15,000 of which was recovered within three days of the inspectorate’s involvement and the remainder shortly afterwards.
In another case, 55 models who were owed £30,000 had their wages recovered following involvement of the agency.
Business Minister Pat McFadden MP said: ‘I’m pleased that the bigger, more powerful agency standards team is out there delivering results for agency workers. The recession should not be used as an excuse to deny people their employment rights, and the agency standards inspectors are a crucial tool in ensuring this.’
01/10/2009CBI cautious over apprenticeship minimum payThe CBI has warned that the new minimum wage for apprentices risks making apprenticeships unaffordable for businesses. Any new minimum wage for apprentices must be set at a ‘cautious level’ if the training schemes are to help tackle youth unemployment, it said.
The organisation warned that setting too high a minimum wage rate would deter firms from offering apprenticeships. It urged the Low Pay Commission to exercise ‘restraint’ when it debates the issue of bringing apprenticeships into the national minimum wage rules in early 2010.
01/10/2009Downturn prompts staff to dump holiday for cashEmployees are increasingly selling their holiday allowance to boost their income, said new research from employee risk and benefits management firm, Aon Consulting.
This year’s Aon flex tracker reveals that ‘holiday trading’, where employees either buy or sell their allotted holiday allowance, has become a popular option with take-up of trading increasing by 21% from May 2008 to 2009.
The proportion of staff selling holiday has nearly doubled from 20% of holiday allowance being sold in 2008 to 35% in 2009. Despite the increase in holiday selling, there were still significantly more people buying holiday than selling it, totalling 65% in the last year, compared to 80% buying in 2008 in better economic times.
About a third of companies in the UK have a formal flexible benefits package, while about another fifth are considering adopting a formal package, said Aon. There are many companies that offer informal forms of benefits.
Holiday trading can be a costeffective benefit for companies but it is uncertain how many of them will respond to requests for cash in present times, Aon reported.
The Aon Flex Tracker is based on companies ranging from 100 – 10,000 employees across UK industry. The tracker measures and compares the take-up in flexible benefits from 2008 to 2009 and ranks benefits in order of popularity.
Other key findings include: charitable giving with green charities doing well, and an increase in voluntary insurance benefits including personal accident, critical illness and travel insurance, with less people changing their PHI cover.
30/06/09Flexibility on pay and hours helps save jobsSince the recession began in 2008, 24% of HR and recruitment workers have had their pay cut. One in four (27%) have lost benefits, and 17% have experienced a reduction in hours, according to a survey of over 1,600 workers by the Keep Britain Working campaign published last month.
Overall, more than half of all UK workers (54%) have either experienced a cut in pay, a reduction in hours, or a loss of benefits since the recession began.
‘This demonstrates just how flexible the British workforce as a whole has been and how changing working terms has helped organisations avoid greater job cuts,’ the survey concluded.
Over the last nine months 27% of UK workers have had their pay cut, 24% have had their hours reduced and 24% have lost benefits, according to the survey. While 37% of UK workers have experienced just one of these changes, 12% have experienced two of them and 5% have experienced all three.
Some two in five workers (40%) have been given extra responsibilities, while one in five – 20% – have had the nature of their role changed within the same organisation.
Interestingly 2% have been offered a semi-paid sabbatical, while 6% have been offered an unpaid sabbatical since the recession began.
Overall 54% said they were more pessimistic about job prospects in June than in May, while 17% were more optimistic, giving a Job Optimism Index Score of minus 37.
James Reed, CEO of recruiter Reed, founded the independent Keep Britain Working Campaign, commented: ‘The UK workforce has demonstrated unprecedented flexibility during this recession, allowing organisations to explore a range of cost-cutting responses other than relying solely on redundancies.
30/06/09Minimum wage rises as Tories seek opt-outThe increase in the National Minimum Wage from £5.73 an hour to £5.80, a rise of 1.2% as from October 1, 2009, was welcomed by the CBI, the only business representative organisation on the Low Pay Commission which recommends the minimum wage level to the Government.
John Cridland, CBI deputy director-general, which represents 240,000 businesses and accounts for a third of the private sector workforce in Great Britain, said about the hike: ‘This moderate increase recognises that many businesses are struggling, and helps protect jobs at a time of rising unemployment.
‘The inflation-busting rise some unions had called for, would have hit firms hard and put many lower paid workers on the dole.’
Law firm Eversheds pointed out that the increase was in line with the recent Low Pay Commission report which tried to balance the need to earn enough and the need to be employed at all. However, Eversheds said, ‘Many businesses had called for a freeze on increases this year and will be disappointed by the rise.’
The announcement came as Conservative MP Chris Chope published a Private Members’ Bill seeking to let workers opt out of the minimum wage.
In response the unions, led by general secretary of the Labour Party Ray Collins, John Prescott’s Wage Concern group and Usdaw, the shop and distributive union, have launched a campaign against Mr Chope’s proposals.
The Employment Opportunities Bill, though unlikely to be passed, has caused alarm on the political Left, prompting fears of abolition of the minimum wage should the Conservatives win the next election. David Cameron has said nothing about the bill.
John Hannett, Usdaw general secretary and member of the Low Pay Commission, said: ‘The minimum wage provides income protection and security for millions of workers. It stops unscrupulous employers from driving down wages across the board.’
John Prescott added: ‘We call on everyone who believes in fairness and social justice to join Wage Concern and help us kill this Tory Bill.’
The Department of Business, Enterprise and Regulatory Reform has published a guide on its increased enforcement of NMW offences. www.berr.gov.uk/files/file50812.pdf
02/06/09How do MPs use their interns?It is an irony given the exposure MPs have been undergoing with their expenses, that there is another grey area – that of internships in both Houses of Parliament. The Commons Business & Transport section issued guidance to MPs in 2006 about interns, but it didn’t make clear to MPs whether they should pay interns the national minimum wage or not.
Like interns in the entertainment industry, political work is seen as glamorous, so Parliamentary interns accept virtually any post to get experience.
In May ex Labour minister Alan Milburn spoke out against the practice that allowed only those from privileged backgrounds who could afford to be interns in popular sectors like the law, entertainment and journalism.
In recognition of the importance of internships as a way of keeping down unemployment figures, The Department of Innovation, Universities and Skills last month set up a scheme for 5,000 graduates to work at companies for 13 weeks, leaving the companies to decide whether they would pay the minimum wage not.
An aide to a woman Labour MP commented that she paid all her interns on the House of Commons contract scale rate.
An internship can be as short as two weeks, though often the internee returns at a later date for more work experience, like the now salaried researcher who told Payroll World that he had done several two weeks unpaid stints with a Midlands Labour MP.
He said: ‘MPs feel they are giving young people a chance to see democracy at work. They can’t take half the students who want to be an intern.’ Fern Coster, an assistant to Labour MP Paul Flynn commented: ‘It is quite a business setting up an intern. Yes, we do pay interns, but commitment to them limits our freedom to spend elsewhere.’
02/06/09Payrollers 'collect twice NHS budget'Plaudits for the payroll profession continued to emanate from Government spokespeople as Phil Nilson from the HMRC business consumer unit told delegates at the Payroll World Annual Update Conference: ‘If you didn’t do what you do, the country couldn’t function. You collect £225bn each year. That’s enough to run the health service twice over.
‘Another reason you are so important is the multiplier effect: because of the work that employers do, the vast majority of employees never have to worry about their tax or National Insurance affairs – because you do everything. Agents look after thousands of employers. You look after millions of employees.’
He said that the Revenue had been working hard to improve communication with employers – and he said he recognised that the primary purpose for companies was not paying tax, but ‘making widgets – or whatever service it is you provide’.
The primary purpose behind the Revenue’s communication initiative was improving compliance, he said, not penalties, and he favoured continuous dialogue.
The Revenue’s ‘Employer Talk’ meetings feature ‘Air and Share’ sessions which have been ‘eye-opening’, he said. ‘It’s a reality check: we think we do a smashing job but smaller employers tell you the truth. It’s really good stuff.’
For all the publicity around the Employers CD-Rom, many employers have still not heard of it, he said.
The quest for better service is one that is common to all large organisations, he said. Like Stephen Timms, he acknowledged concerns that some payroll managers might want to talk to a person rather than have automated replies to a query. ‘We’re not experts. We should be talking to the likes of Orange and Virgin,’ Mr Nilson concluded.
01/05/09Soldiers 'receive wrong pay' say MPsThousands of members of the armed forces have received the wrong pay, because of ‘catastrophic’ errors in a new payroll system, the Commons Defence Committee has found.
The MPs found ‘basic and fundamental’ errors in the Joint Personnel System, the integrated system introduced in 2006 to serve the army, navy and air force, and designed to save money.
Some personnel were underpaid by as much as £345 a month and experienced trouble with mortgage payments, while nearly £30m was overpaid to others, the report said. The new system was found to hold incorrect details for about 10% of the payroll, or 20,000 individuals.
‘It is difficult to exaggerate the magnitude of the failure of the Joint Personnel Administration,’ the report added. ‘It is ... truly reprehensible that such mistakes were allowed to be made by those charged with oversight of the JPA programme.’
Some 300 human resources posts had been lost, which may have contributed to the problems.
The Ministry of Defence apologised for the problems but insisted the system was now working better. The JPA was supplied by the US computer firm EDS.
Two years ago a similar set of problems affected several NHS trusts, where nurses received the wrong pay.
01/05/09BMI at centre of pay disputeBALPA, the pilots’ union, has claimed that airline bmi has removed pay increases from pilots’ bank accounts. It is seeking legal advice over the matter, though the airline has denied it removed any money.
The allegation surfaced amid an industrial dispute that became increasingly bitter last month, during which the union called for a vote of no confidence in Nigel Turner, bmi’s chief executive.
BALPA sent the bank statement of one of its members to the national press. It shows £4,838 paid in by British Midland Airways on 28 January. The amount is then recalled and £4,631 paid back in the next day.
‘This is as serious a situation as I have come across,’ said Jim McAuslan, General Secretary of BALPA. ‘As well as the pilots balloting on a motion of no confidence, we are exploring legal action on these events that have absolutely astonished the lawyers.’
Bmi blamed the banks for the error. It said no money had been paid to staff by bmi and therefore the airline could not have removed it. Since the dispute erupted, the two sides have sought a negotiated settlement. This is likely to include agreement on a pay freeze from April 2009, and joint action to identify cost savings.
05/03/09High Court ruling on tips case nearsUp-market London night club Annabel’s is awaiting a High Court decision, due shortly, on a long-running legal case appeal that concerns waiters’ tips and the national minimum wage. Last June, Annabel’s lost the case, brought by HMRC.
If the HMRC wins the case – assuming Annabel’s decides not to go to the House of Lords – it will strengthen the Government’s resolve to introduce new legislation that will make employer/employee rules involving the tax and National Insurance Contribution status of wages and gratuities more transparent.
The legislation, due later this year, would span any jobs that involve tips, including hospitality, catering and entertainment sectors.
Nick Cowley, finance director of Annabel’s, said: ‘It is a historical issue relating to a pre-2003 period, not having much to do with current practice in restaurants, but it is important to us because, over time and given the number of staff we employ, it could be expensive if we don’t win.’
HMRC decided to take Annabel’s to court because its waiting staff were among the highest paid in the country.
It seems that top rates of tax were being deducted from these waiters while they were not being paid the basic minimum wage in pre-tips income.
John Chaplin, a director in employment tax at KPMG, said: ‘The practice of paying tips outside the national minimum wage is not uncommon. But the short answer is that the sector is poised to experience a hike in salary bills, having to pay the minimum wage.
‘HMRC has been clear on the matter. It thinks tips are part of pay for tax purposes and NICs are likely to be included but more dependent on circumstances. It looks as if employer and employee will be paying more NICs.’
05/03/09More wage cuts likely, but staff may refuseThousands of employees face the prospect of taking a pay cut or losing their jobs, The Times has reported. One company that is seriously considering the move is Corus.
The company said that ‘in the short term, payroll reductions and specific government support for temporary unemployment could be of great assistance to address the current market conditions’.
Manufacturing has been hit by the downturn. There have also been pay cuts at JCB as workers have accepted reduced hours. JCB chief executive officer Matthew Taylor said: ‘Our employees voted to save 332 of their colleagues’ jobs which was commendable. In turn JCB is now supporting their decision as much as possible by retaining 336 people who ordinarily would have been made redundant. All job losses are regrettable but we have jointly saved 668 jobs from more than 1,240 that would otherwise have been at risk.’
Norman Green, head of payroll legislation at Logica, said that companies cannot force people to take a paycut. If a company asks all employees to take a reduction in salary, anyone can refuse.
‘This could mean that all the workforce takes a cut in salary but one or two people could refuse,’ he said.
‘In future when the company is on a stronger basis they may receive higher pay increases than those people who refused to accept a pay cut.’
Mr Green added that he knows companies where this has happened.
02/01/09One in ten staff would take pay cut to save job
Salary cuts could become widespread in the UK as 10% of employees say they would rather suffer a reduced income than lose their jobs. A survey produced by Ceridian also showed that a quarter of the 1,000 people questioned would be prepared to work shorter hours because of the downturn.
Some 10% of people would take a demotion to ensure that they don’t lose their job, while 44% would accept an increase in workload and one in three would voluntary work longer hours.
‘A recession is a stressful time. Employers need to ensure that they have the mechanisms in place to support their employees,’ said Karan Paige, chief people officer, Ceridian.
The survey also shows that the workplace is becoming increasingly cut-throat. Nearly one in ten of those taking part in the survey said that they would be prepared to stab people in the back if to prove their value at work.
Almost one in ten said that they would tolerate unacceptable behaviour from their managers.
The findings also put into focus what is really valuable to employees. Some 57% of employees would give up private healthcare and 43% would put on hold healthcare such as physiotherapy and counselling.
Also a sign of the times is that employees value access to financial personal advice and honest dialogue from their employers.
02/01/09UK is affected by a 'pay day effect' in spendingThe UK economy is experiencing a ‘pay day effect’, according to Tesco boss Sir Terry Leahy. He told a conference that people are concentrating spending when they receive their pay rather than spreading purchases throughout the week or month.
‘We are seeing a pay day effect on our sales, of the kind we’re used to seeing in Europe and Asia,’ he said.
Earlier this year US retail giant Wal-Mart spoke of ‘pay cheque cycles which are becoming more visible’.
The phenomenon is more often associated with developing countries, so its appearance in the UK is a strong indication of recessionary conditions.
It could put considerable pressure on payroll departments as employees are desperate for their money.
Karen Thomson, associate director, policy & research at the Institute of Payroll Professionals said that staff know when pay day is and would not ask to receive money early. ‘I do think however that if employees were due a bonus, commission or travel money they will be keen to ensure it is paid as early as possible and without delay.’
Miranda Miles of Kent County Council told Payroll World that the authority had not yet experienced this effect.
In another symptom of the recession, some firms are looking to cut payroll transaction costs. Enrico Liverani of the bureau DCS Payroll has noticed an increase in companies considering outsourcing payrolls.
02/12/2008Staff sacked for failing to disclose duplicate payPayroll teams in Torbay Council and Torbay Care Trust paid transferred employees duplicate pay runs for over a year, it has emerged. Three health workers have been sacked after managers learned that they had failed to declare a total of around £50,000 in overpaid wages. This money is being claimed back through the courts.
‘It occurred when some members of staff were transferred from the local authority to the care trust,’ a spokesman for the Torbay Care Trust told Payroll World. ‘The payroll system didn’t cut off the pay when they were transferred over.’
No payroll managers have been disciplined for the error, he said. ‘They are working with the trust and the authority to identify what the issues were and what occurred.’
Five staff did volunteer the information that they were being overpaid. When they alerted managers, the council and the care trust investigated. The duplicate pay-runs occurred for between a year and 14 months after the jobs were transferred in 2005.
A joint statement issued by the council and the trust said: ‘Swift action was taken to suspend these employees to enable in-depth investigations to take place. In strict accordance with the trust’s procedures, these staff remained on its payroll while the investigations were carried out. These culminated in disciplinary hearings. The statement added: ‘A significant amount of money has been reclaimed through the courts.’
02/12/2008Banks to change pay schemesBanks will be forced to have radically redesigned pay systems, especially those that were part-nationalised in last month’s historic bailout. As expected (news, October, page 9), the impact is likely to be far-reaching.
A major objective is to prevent incentives in the bonus system leading to high levels of operational risk. The large injection of public cash into leading banks means that ministers will want curbs on pay, both to prevent risktaking and to avoid the perception of taxpayers’ money lining executives’ pockets.
Last month, the Treasury announced a range of conditions that are to be attached to its multi-billion pound part-purchase of HBOS, The Royal Bank of Scotland and Lloyds TSB.
Ministers agreed with the banks a policy for remuneration, ‘where incentive schemes will be reviewed and linked to long-term value creation, taking account of risk, and restricting the potential for “rewards for failure”,’ the Treasury confirmed in a statement on 13 October.
Adjusting for risk implies complicated calculations for bonuses. Historically, banks have rewarded executives and some traders on the basis of straightforward profit/loss calculation over a 12-month period. This has been undifferentiated as to whether the business was low risk, ie a loan to a triple-A rated corporation; or high risk, such as subprime lending. That will now have to change.
UK Treasury announcement: http://www.hm-treasury.gov.uk/press_105_08.htm
03/11/08Renewed campaign against youth rateThe Employers Forum on Age has called for equalisation of minimum wage rates for all those over the age of 18, in a renewed campaign against the lower youth rate for those aged under 22 – currently £4.77 per hour – compared with the full adult rate of £5.73 per hour.
The Forum, which is a network of leading employers, will submit evidence to the Low Pay Commission in support of its claim. It also published research that challenged common fears of a higher youth rate, which have included lower education involvement or higher unemployment among young people.
Catharine Pusey, director of the Forum, said: ‘On the basis of our research and analysis, we believe that a removal of the development rate would have minimal negative impacts on employment for 18-21 year olds and that it is likely, in the long run, the positive impacts would more than offset the negative impact.’
She added that the absence of any link to skills or training means that a lower rate constitutes direct age discrimination. ‘A 21 year old could be doing exactly the same job as a 22 year old, but legally the employer can pay the 21 year old less, simply because they are younger.’
03/11/08Firms not aware of minimum wage riseAround a third of UK small businesses don’t know that the national minimum wage went up on 1 October, and could face fines of up to £5,000, a new study found.
Bibby Financial Services, which conducted the report, found that 31% of small business owners and managers were ‘not fully aware’ of the October rise from £5.52 to £5.73 for adults aged 22 or over, while 44% of smaller businesses, those with four or fewer employees, were ‘completely unaware’ of the planned increase.
Regionally, the situation appeared more alarming. Over 50% of small firms across the North West and East Anglia were unclear about the new rates. The study found that while more than three quarters of hotels and catering firms knew about the rise, two thirds of agricultural managers were ‘uncertain.’
The reported confusion appeared at a time when the Government launched a Fair Employment Board aiming to safeguard workers’ rights over minimum wage as well as health and safety.
Last year, a children’s nursery owner became the first person to be prosecuted by HM Revenue & Customs for breaking minimum wage laws. The new legislation has potential cost implications.
David Robertson, Bibby’s chief executive, said: ‘With each criminal offence carrying a fine and a criminal record, small businesses need to be fully aware of the legislation or risk the consequences.
‘When business costs are escalating rapidly as the credit crunch continues to bite and fuel costs soar, the rise in the national minimum wage could put a significant strain on many small businesses.’
01/10/08Work for benefits plan exempt from pay floorGovernment plans for unemployed people to be forced to work for their benefits have put the spotlight on a complex set of rules for National Minimum Wage exemptions.
Welfare reforms have been unveiled by Work & Pensions Secretary James Purnell in the form of a green paper. This sets out back to work programmes for long-term unemployed people.
This raises the question of whether such individuals would be entitled to receive the minimum wage. HM Revenue & Customs upholds strict laws ensuring that everyone expected to attend work between certain hours and carry out specific duties should receive the minimum hourly rate.
Responding to questions from Payroll World, a spokesperson from the Department for Business, Enterprise & Regulatory Reform (BERR) said exemption for Government-backed training schemes is not automatic, but would apply in this case: ‘People taking part in some Government employment programmes intended to provide them with training, work experience or temporary work or to assist them in seeking or obtaining work are exempt from the National Minimum Wage.’
But those on the subsidised employment offered by the New Deal are entitled to the minimum wage.
03/09/08IPP continues bid to payroll benefitsThe Institute of Payroll Professionals has responded with concern to the Government’s consultation paper on replacing the annual P11D process for expenses and benefits. A majority of respondents opposed the move, which had been touted as a means of cutting red tape.
‘A large number of respondents said they didn’t consider the P11D regime burdensome and were quite happy with it. Rather, it is the method used for calculating the value of particular benefits that caused employers and their representatives greater concern,’ the paper, published by HMRC, reported.
But Karen Thomson, head of policy at IPP, questioned whether equal weighting should have been given to all 67 respondents to the consultation. The institute had carried out its own survey, with nearly 494 responding, 75% of whom were in favour of the switch to payrolling. ‘It’s a little unfair to say the majority opposed it, when there was no weighting [for representative bodies]. Our members said that as long as problems are sorted, they’re in favour,’ she said.
She also questioned the degree of support for the annual P11D process, saying it had been identified by the Administrative Burdens Advisory Board as a source of unnecessary administration.
The savings from payrolling benefits would come from ending the parallel systems.
But there may be extra costs by switching from annual calculations to calculation each pay period, as the value of some benefits will fluctuate (see News, page 6, March 2008). Bureaux may pass this monthly cost on to clients.
Ministers are set to make a final decision in time for the Pre-Budget Report this autumn, an HMRC spokesman said.
01/08/2008Angry reaction to 'appalling' mini-budgetPayroll managers reacted furiously to the mini-Budget, which is almost certain to cause confused employees to come to payroll offices in the autumn, requesting explanations. The fact that individuals will benefit from back-dating of the raised income tax thresholds, while others on identical salaries will not, could cause anger.
Sharon Dunne, payroll manager at Marie Curie Cancer Care, described the situation as ‘appalling’. She said that the Chancellor Alistair Darling had mis-led the public by claiming that everyone who pays basic rate will receive a rebate (see lead story). ‘People will be confused. On BBC Question Time when members of the public spoke up they said that they don’t understand tax. Employees will go to their payroll offices and ask: “Why have you done this to me?”’
Payrollers also criticised the existence of three different upper earnings thresholds for income tax occurring in one year; with last year’s threshold continuing for April, the formal Budget change from May, followed by the amended version in the autumn. ‘It appears to make a farce of the whole tax and National Insurance alignment process,’ said Ms Dunne.
Clare Wood, UK compensation & benefits manager at Anglo Irish Bank, said: ‘The idea of having to make in-year changes such as this puts enormous pressure on employers at a time when the Government are allegedly trying to reduce the burden. ‘Not only will we have to input hundreds of unforseen tax code changes, but we will have to field questions from employees querying the process, querying the results and not understanding the whole thing.’
01/06/08Confrontation fears on child support changesPayroll managers are set to face more demands following changes to the Child Support Agency (CSA).
Following recent changes, mothers who successfully claim they deserve more money for child support will also be able to claim a share in any profits their expartners make from selling assets. In this, authority will be given to civil servants to access the father’s bank account and withdraw ‘lump sum deduction orders’.
With the controversial CSA axed and replaced with the Child Maintenance and Enforcement Commission (CMEC), powers will be given to take payments directly from wage packets.
The impact on payroll managers though is set to increase as they face more deductions and could be caught in the crossfire in parental disputes over nonpayment of child support.
Audrey Williams, partner at Eversheds, said: ‘There is the right to deduct and clearly if people are given that power if it is authorised by statute.’
Karen Thomson, associate director at the Institute of Payroll Professionals, said: ‘CMEC will have new ways to tackle non-payers. The current process allows deductions from wages. At the moment it is the last resort, but in the future it may be the first port of call.’
Speaking to the Financial Times, Kim Fellowes, a family law expert who has briefed MPs, said: ‘Ministers are rubbing their hands in glee because these extraordinary new powers have gone through on the nod, but when they come into force, there will be chaos. There will be endless appeals.’
The move represents yet another way in which Government legislation can force payroll managers to be confronted by employees over a highly emotive issue. The tougher rules on child maintenance come alongside the mid-year changes to tax thresholds that benefit some staff more than others.
01/06/08Maurice Cheng restates concern on fake formsThe Institute of Payroll Professionals has urged employers to be more thorough when checking the authenticity of payroll documents.
Maurice Cheng, chief executive of the Institute of Payroll Professionals, told Payroll World: ‘If you go back about a year we talked about the absence of official forms, P60s and so on. You can buy these sorts of forms for about £13, just type it into Google and you’ll get about three pages of hits, and all you need to do it tell them who your former employer was, what you were paid and they will produce it for you.
‘To us the fact that you can fake a P45 is not good, but it is the responsibility of employers and also banks to act on it and do checks and verify it before accepting it. If when you are doing a credit card application they will normally ask for the last three payslips, can you now fake them too?
‘To combat against this you will need to do more checking and say “did this come from you?” In any instance there is a chance it could be faked as you can buy document information from stationers, nothing is really safe now but what makes it safe is checking.’
The warning comes shortly before P45s are available to be downloaded and printed in plain-paper form. This will be possible from October (see News, March 2008). Concern has mounted that they could be used for fraudulent activity.
HMRC has published all the information they require in order to reproduce the document on its website. The information includes details of font style and size and where the document should have bold lettering.
There are fears that an individual could submit a fake P45 when starting a new job and leave a short time after with a genuine, conventional P45.
01/06/08Payroll error leaves staff underpaidAdministrator KPMG has been criticised after a major payroll error.
The accounting giant was appointed as administrator of trade publisher Charterhouse Communications after it was hit by the credit crunch due to its titles being primarily mortgage based. Around 20 staff were made redundant in mid April, but these employees were given a full month’s salary. Payments were received at the end of April with employees receiving a letter asking for the payments to be returned a few days later.
One former Charterhouse employee claimed: ‘When I checked my bank account I saw that that this money had gone in, and I automatically assumed that the company had paid up the redundancy as all of the staff would be claiming it anyway, which seemed like a decent gesture.
‘However later in the week I received a letter from KPMG asking for the payment to be returned as it was a payroll error – but the account number for it to be paid into only had seven digits rather than the necessary eight, so the attitude of the staff was: “Why should I go to the extra effort?”.’
A spokesperson for KPMG said: ‘There was a mistake made but KPMG was not responsible for the payment. As administrators we have written to all previous members of staff asking them to return the payments and a significant amount has been returned. This has not affected the creditors, but a mistake has been made and we are working hard to rectify it.’
01/06/08Equal pay audits set to be in place by April 2009The long awaited Equality Bill is set to be published imminently, and is likely to include provisions for equal pay audits, and use of procurement by public sector bodies to promote equal pay practices in the private sector.
Audrey Williams, partner at law firm Eversheds, told the Payroll World Annual Update Conference on 10 April that the deputy Labour leader Harriet Harman is ‘pushing hard’ for much stronger regulations to reduce inequalities in pay.
‘She wants equal pay audits and reviews,’ said Ms Williams. There are also likely to be proposals around representative action, ‘making it easier to bring group claims’.
The Bill is likely to become law this year, in which case the changes could be in place as soon as April 2009, she added. At the Women’s TUC conference in March, Ms Harman set out four principles for reform of equal pay regulations:
Transparency – ‘So everyone can see where there’s progress and where there’s unfairness and work together to change it,’ she said,
Looking at how public procurement can promote equality practice in the private sector,
Tougher enforcement,
Positive action.
Different degrees of compulsion on equal pay audits would present options for ministers. An audit could be compulsory for all large companies, or reserved for those that have lost an equal pay claim in the Tribunal, for example.
The development illustrates an impact of the election of Harriet Harman, a longstanding campaigner for women’s rights, as deputy leader of Labour. But there is no guarantee that the issue would go away if Labour lose the next election. Last autumn Conservative Party leader David Cameron annoyed some business leaders by indicating support for audits. Action to reduce the pay gap between men and women is something a Conservative Government would ‘pursue with vigour’, Mr Cameron told a conference in September.
In a separate development, the Government is likely to give in to Labour backbenchers on rights for agency workers, Ms Williams said.
Last December, UK ministers joined with other Governments to block proposed EU legislation giving equal employment rights to agency staff. A UK Private Members Bill promoted by Andrew Miller has attracted widespread support from his fellow Labour MPs. ‘The UK Government might be willing to do a deal,’ Ms Williams told delegates.
28/04/08Nice work, public payA contentious list of the world’s top football player salaries revealed AC Milan’s Ricardo Kaka gets the biggest pay cheque at nearly £7.5m a year, or £143,438 a week.
Barcelona’s Ronaldhino is the only other player whose pay packet also tops the £7m mark at £7,060,950, with Chelsea’s Frank Lampard and John Terry level-pegging on £6,762,600 each.
The authenticity of the table, posted on political blogger Iain Dale’s Diary on 2 April, has been disputed on fan blogs, but the earnings of the top 10 players are known to run well into the millions.
A spokesman for the Football Association’s press office said: ‘I really wouldn’t know about the authenticity of these figures because I assume these are the salaries that clubs are paying their players, which, in many cases, are confidential arrangements.
I wouldn’t feel comfortable commenting,’ he said.
The development confirms the public’s interest in the huge rewards of top footballers. Last year, a full payslip, including the National Insurance number of Liverpool player John Arne Riise, appeared on a website (News, December 2007, page 9).
28/04/08MPs and staff wake up to the Budget’s losersPayroll office phones are already ringing as MPs and many employees absorb the reduction in take-home pay for significant numbers of individuals following this year’s Budget, Kate Upcraft told delegates in her keynote speech.
Take-home pay for an employee with a single person’s allowance and paying A rate NI will be slightly lower for those on less than £25,000 a year. ‘That’s not what people thought when they heard the flourish at the end of last year’s Budget about the basic rate going down to 20p,’ she said. Another factor is the increase in the Upper Earnings Limit from £34,840 to £40,040. ‘That’s a huge slice of income that’s now NI d at the full rate.’
She mocked Labour MPs for cheering last year’s pre-announcement of the basic rate changes, only to discover, following a dip in opinion poll ratings, that the removal of the 10p starter rate leaves many of their voters worse off, in spite of the lower basic rate.
Ms Upcraft commented that PAYE changes got far less publicity than the £30,000 flat tax for resident non-domiciled workers in the UK, and the proposed streamlining of Capital Gains Tax. Payroll managers need to represent the interests of payroll departments and the employees they pay, she said.
21/04/08Council bosses earn more than Gordon Brown Some 14 local authority managers earn more than the Prime Minister at £188,849, with 132 earning more than a cabinet minister at £137,579, according to a report by the Taxpayers Alliance.
In the UK, more than 818 council employees earn over £100,000 a year, the report added. The average salary of the council’s top earners is £120,938, which is over £2,300 a week.
The second annual Town Hall rich list has revealed that six people in town halls take home more than £200,000 a year, the tax pressure group added.
The report said those on the rich list received a pay rise of 4.6%, which is more than double the Government’s target for public sector inflation. The list has also leapt from 645 last year to 818 council employees this year, which is up 27%.
Matthew Elliot, chief executive of the Taxpayers Alliance, said: ‘Taxpayers have a right to know how much senior town hall officials are being paid because only then can we judge whether they deserve their remuneration. Too often, council executives are rewarded handsomely even when they fail.’
He added: ‘Families and pensioners are struggling with the demands of yet another council tax rise, and councils owe it to them to cut back on council pay hikes.’
The report, Council Spending Uncovered, suggests despite council tax doubling in the last decade, local authorities almost universally say that they are short of money and need to increase council tax further or reduce frontline services.
02/04/08NHS agency staff on £120 an hourAgency nurses are being paid over £120 an hour, eight times the average hourly pay for a nurse of £15.66, the Conservative Party have claimed.
The figure was revealed in a reply under the Freedom of Information Act obtained by the party, which asked all NHS trusts across the UK to reveal the top hourly rate that each had paid for agency staff during the previous 12 months.
The Conservatives accused the Government of bad workforce planning. A spokeswoman told Payroll World; ‘On some occasions the Department of Health failed to recruit enough doctors or nurses and trusts were left to fill the void.’
One trust appointed a turnaround director and paid him £119 per hour, the Conservative’s research also revealed.
A spokesman for Coventry Teaching Primary Care Trust, which appointed the turnaround director, defended the decision: ‘The PCT employed a part-time turnaround director last year… This work was hugely successful and significantly contributed to turning a £13m deficit to a £4m projected surplus within 12 months.
‘The way in which the PCT coded this payment may have differed from other NHS Trusts, classing it as agency rather than consultancy, which is why when asked under the Freedom of Information Act this was disclosed and appears to be the highest.
‘We are aware that the PCT paid under the going rate for this service and many other organisations will have paid higher rates, just classified it differently for financial audit purposes,’ he added.
Chesterfield and Royal Hospital NHS Trust shelled out £121.10 while ‘financial staff’ cost Heatherwood and Wexham Park Hospitals NHS Trust £110 an hour.
Trusts pay the wages to the firms, who take an average cut of about 30%, the Royal College of Nursing said.
Nurses received a below inflation pay rise of 1.9%.
05/03/08Earnings keep on risingAverage earnings have risen by nearly 3% from 2006, official figures from the Office of National Statistics (ONS) have revealed. Gross weekly wages grew from £444 in 2006 to £457 in 2007.
The figures also reveal that the gender pay gap has narrowed from 17.5% in 2006 to 17.2% in 2007.
The ONS survey showed both an increase in the number of people in employment and the employment rate. The number of unemployed people, the unemployment rate and the claimant count have all fallen the research found.
Growth in average earnings excluding bonuses has increased but earnings growth including bonuses has fallen.
In the three months to December 2007, 111,000 people reported they had been made redundant in the three months before their Labour Force Survey interview, down 24,000 from the three months to September 2007.
The inactivity rate and the number of inactive people of working age have both fallen. The number of vacancies has increased.
05/03/08Payroll blunders are endemic in the NHS - EXCLUSIVE BY SARAH MACKINLAYThe National Health Service is suffering systemic payroll problems with workers suffering incorrectly calculated wages for extended periods.
Project management capabilities are under fire following significant pay errors in a number of trusts across England. In the most recent example, at the Isle of Wight NHS Primary Care Trust, problems have become so acute that nurses have reportedly lost their homes. Health workers on the island have had their night enhancement pay wrongly withheld after an outsourced payroll provider Shared Business Services took over the payroll in 2006.
Christine Wild, who is both an employee at the Isle of Wight Trust and is the Unison branch chair, told Payroll World: ‘Shared Business Services set up a help desk to address the problem and for two days a month someone comes to the island. But staff queue for ages waiting to speak to someone who can help them sort out their payroll problem.’
As this process is time consuming most staff try to sort the problems by phone and email, she said. ‘However, it is difficult to get through on the phone and they don’t always answer emails,’ she said.
Meanwhile, North Devon Healthcare NHS has terminated its contract with United Healthcare Birmingham and taken its payroll department back in house just over a year after outsourcing. The decision was taken just before Christmas after staff complaints about pay errors.
A spokesman for the trust said: ‘UHB could not guarantee the quality of service we require.’ The Isle of Wight trust has continued with its outsourced provider.
Last year at Leicester NHS Foundation Trust 4,000 members of staff were affected by payroll problems (News August 2007), and Birmingham East & North Primary Care Trust overpaid 331 members of staff for three and a half years.
Dave Godson, national health officer Unison, said: ‘Some of the staff affected by payroll errors are already low paid, and a slow resolution by the employer will result in significant hardship for them.
Wages and salaries are covered by legislation and where appropriate we will take action and seek compensation for our members when any breach of the law occurs.’
By December The Isle of Wight County Press reported that some staff had told them: ‘Nursing staff are losing their homes. One colleague has had to move back in with their parents.’
However, the trust’s spokeswoman sought to play down the claims. ‘There have been some issues with pay, but through the efforts of both the PCT and its payroll service provider, we have resolved these for the individuals concerned.’
Shared Business Services declined to comment separately to the island’s statement.
The Department of Health denied that there were systemic failings. A spokeswoman said: ‘There is no evidence to suggest that there is a particular problem where payroll projects have been outsourced.’
But nurses involved in the night enhancement pay saga have been particularly badly affected. Under the Agenda for Change, the new single pay system imposed in 2004, they are entitled to their night enhancement pay while sick, but in some regions this has not been paid.
Ms Wild said that she had been helping one lady who was expecting her usual salary of £900 but received just £300. ‘Like everyone else she has direct debits and bills.’
31/01/08IT pay rises in the southIT salaries in the south east region have increased by 3.4% over the last 12 months. The survey by IT recruitment agency CV Screen examined IT jobs in Surrey, Kent, Essex, Bedfordshire, Hertfordshire and Sussex and concluded that the average permanent IT salary is £33,513.
31/01/08Teachers divided over payTeachers unions are divided by the three-year pay deal announced last month. The National Union of Teachers argued that many of its members would be worse off. But the National Association of Schoolmasters Union of Women Teachers said its members had done better than workers in other areas of the public sector. The Head Teachers union said they had already endorsed the deal.
31/01/08Flex for payAlmost one in four employees (22%0 would be prepared to take a pay cut to work from home, according to a survey by software company Farmatech. More than eight out of ten respondents said that their decision on whether to take a new job would be influenced by the ability to work from home.
31/01/08Public sector equal pay plans in disarrayCouncil bosses across England are being forced to remortgage their town halls to meet a £2.8bn bill owed to a generation of women who were underpaid by their local authorities.
Some 700,000 women are due salary rises and back pay of up to six years following a European Union Directive in 2003 on equal pay.
Schools have been told to find up to a third of the bill out of their reserves to compensate classroom assistants and cleaners who have been systematically underpaid. Some employers have struck deals with unions, while many are now facing legal challenges from no-win, no-fee lawyers seeking better terms for women.
However, public sector unions are threatening strike action over equal pay deals for council workers after proposed cuts of up to £35,000 for thousands of male staff.
Unison and Unite are balloting members at Birmingham City Council over industrial action because nearly 5,000 of its staff face salary cuts to fund rises for low-paid women.
Despite unions battling to improve salaries for the lowest-paid women, they are concerned that male colleagues and some higherpaid women will pay the price through pay cuts.
Mark Serwotka, general secretary of the Public and Commercial Services Union said: ‘The fear is that what the Government have in mind is three-year pay deals similar to that imposed in the Department for Work and Pensions, which delivers a pay cut in real terms and sees 40% of staff receive no pay rise in the second year.’
Andrew Albon, Birmingham’s director of human resources, said that nearly 5,000 staff would lose money, including 3,347 women.
31/01/08Rail staff 'suffer pay cut' if attackedNorthern Rail workers who take time off following an assault or abuse by passengers will have their pay docked, according to rail union RMT.
Following consultation with the union, Northern Rail’s policy had been to pay average wages to all staff who needed time off after suffering violence or abuse from passengers. The change in policy only came to light after one of its conductors, who had been physically assaulted and threatened with a bottle, was told he would only receive his basic pay, rather than average wages because the attack on him had not been serious enough.
RMT general secretary, Bob Crow said: ‘This is shocking and completely unacceptable, and the union will do whatever is necessary to get this shameful policy change reversed.
‘Only last April the company reassured our reps that staff who needed time off after serious verbal abuse would receive average pay.’
But a Northern Rail spokesman said: ‘Our pay levels and care policy for employees who have been assaulted have been agreed in full consultation with the trade unions. We believe that they are in line with industry standards and in some areas they represent best practice in the industry.’
31/01/08Payroll errors for the majorityMore than half of the UK’s employees have been affected by a payroll error at some stage in their career, according to a new report. The research, by ADP Employer Services, showed that of those affected by an error 41% had been underpaid and only 17% had been overpaid.
Not surprisingly, employees were more likely to report an underpayment rather than an overpayment. Only 2% said they didn’t report a shortfall compared to 20% who failed to report an overpayment.
Some 11% of employees admitted to not regularly reading their payslip, and also claim they are not aware of what information they should be looking out for, the research revealed.
Almost one in five said they would not notice if they had suffered a pay error.
The results show a different picture from other surveys, which have indicated that up to 98% of people check payslips.
Failure to report money that has not been legally earned can result in prosecution. A Royal Bank of Scotland employee who was overpaid £30,000 received a nine-month suspended prison sentence and ordered to do 200 hours of unpaid work for spending the overpayment.
30/11/07Big jump in payAverage earnings including bonuses have increased substantially, according to data published by the Office of National Statistics. The figures were published on the same day the Governor of the Bank of England struck a hawkish tone on pay pressures when launching the Bank’s quarterly Inflation Report.
30/11/07NHS hit by another blunder over payA primary care trust has overpaid staff by an estimated £200,000 for three and a half years, because of an input error. More than 300 employees at Birmingham East & North Primary Care Trust were paid incorrectly, the trust admitted.
In total the trust has confirmed that 331 members of staff have been paid incorrectly – 82 of whom are still being paid at the wrong level. Jonathan Tringham, director of resources at the trust, told Payroll World: ‘The members of staff affected will not be asked to repay the money. All 82 staff will be moved to their correct salary from February 2008. We estimate that the total overpayments created by this error over the last three and a half years amounts to around £200,000.
‘All staff affected by this error have personally been notified, and individual discussions are taking place to ensure employees understand the changes that are now to be made.’
The trust said that staff from all groups were affected, and the problem was not limited to a specific area or staff type. The trust has subsequently checked all payroll records and there are no other employees who are being paid at an incorrect level, it stated.
Birmingham East & North Primary Care Trust emphasised that the pay errors relate to technical issues with the payroll provider, University Hospital Birmingham NHS Foundation Trust, and are not a result of fraud.
Unison regional organiser Esther Lowe said the problems began three years ago when a new NHS pay system was introduced: ‘We are pleased to hear staff at this trust are not being asked to repay the extra money, but our members in some other trusts are having problems over the same issue,’ she said.
30/11/07Footballer's payslip on internetLiverpool Football Club has launched an investigation after one of its players had his payslip published on the internet. The document shows the details of John Arne Riise’s basic monthly salary.
In addition to details of his monthly salary the document also has information on the Norwegian defender’s appearance bonus, points bonus, Champions League salary increase, and charges made for complimentary meals and tickets.
The pictures reveal his home address and National Insurance number. Under staff department it says: player. A spokesman for Liverpool Football Club told Payroll World: ‘We are taking the matter extremely seriously and we are investigating. The agent and player are in discussions and deciding how to proceed.’
And a source close to the club told Payroll World: ‘He is not the kind of player to screw up a payslip. It points to someone lifting it from the house or it may have been seen in a car.’
The images are believed to have been taken in April and outline his wages last September.
Mr Riise earns around £2.5m a year at Anfield. He became Liverpool’s first signing during the 2001 summer break, when he moved from Monaco in a £4m transfer deal.
30/11/07Wage blunder hospital declined trial pay-runPayroll provider Capita had wanted to do a parallel run before going live at an NHS trust that paid thousands of employees the wrong amounts earlier this year, it has emerged.
John Allen, chairman of the Leicestershire, Leicester & Rutland joint health overview and scrutiny committee, told Payroll Worldthat Capita wanted to do a dry run at the Leicester NHS Trust, ‘But the trust said no,’ he said. He declined to confirm the reasons.
A spokeswoman for Capita said: ‘Capita was keen to perform parallel running within the scope of its planned pre-commencement activities, and did not seek to make any specific charge to the consortium for this.’
The trust has presented its report to the committee on the problems that led to nurses receiving the wrong pay. Processing errors and poor handler response were the causes of problems, it found.
The committee heard that since the initial problem, where a third of staff, around 4,000, had encountered a payroll problem, the proportion of payroll queries went down to 6%. But the trust conceded that it had some way to go before normal duties resumed: ‘This is still an unacceptable level. There is still some way to go to reach a “normal” payroll level of queries that is about 2-3% of staff,’ the trust’s report said.
Mr Allen added: ‘Those people who had not been paid still had the usual expenditure, but their credit rating may have been affected if they missed payments or direct debits. They were given letters but this will have had little effect and some won’t have been able to apply for mortgages.’ Mr Allen has received a letter from the trust informing him that the number of outstanding cases is now just 26: ‘I am quite happy it’s in hand and I’m not getting the numbers of complaints I was. We are pleased about this but we had to shout at them. The problems have left a scar.’
Kathy Renacre, director of human resources for Leicester’s hospitals said: ‘We have worked very hard with Capita. As a result, September’s pay run queries are down to 4% and we continue to work with them to improve on this.’
The trust and Capita refused to be drawn on the exact value of the contract, stating: ‘It is commercially confidential.’
A spokeswoman for the Leicester NHS Trust declined to give further details on the errors or the reasons for declining the trial run.
31/10/07City plans renewed pay termsThe Corporation of London will terminate employment contracts of up to 3,342 of its staff only to re-engage them on different terms and conditions, the union Unite has warned.
The union is concerned that the new terms and conditions will be to the detriment of employees and that the proposed changes will disproportionately affect women.
But a spokesman for the Corporation said: ‘We are very surprised the union has taken this stance, as Unite already balloted its members at the City of London to ask if they are in favour of these proposals. Their ballot returned a majority “yes” vote.’
The corporation said that the pay reform is genuine and does not involve an overall cut in the pay bill. Any proposal will emphasise fairness, especially under anti ageism and gender equality laws.
Performance related pay will also feature strongly in any proposed reforms.
Steve Hart, Unite’s regional secretary said: ‘It is extremely disappointing that the Corporation of London has chosen to terminate the employment contracts of so many staff while discussions on their futures take place.’
He added: ‘It’s wholly unnecessary and only serves to fuel insecurity and fear.’
31/10/07HMRC appeals as ruling says troncs are includedHMRC is considering an appeal after losing an employment tribunal case on troncs – the pool of tips shared out among staff. The Central London Employment Tribunal ruled that money paid to restaurant employees through a separate tronc payroll does count as earnings towards the National Minimum Wage.
A spokeswoman for HMRC confirmed: ‘We are currently awaiting the tribunal’s detailed reasoning of its decision before considering this matter further.’
Independent payroll expert Kate Upcraft called for the Revenue to rewrite sections of its guidance E24, which covers tips, gratuities, service charges and troncs.
She said: ‘The Revenue rewrote a number of sections in its E24 information booklet after they were found to be giving incorrect advice over National Insurance Contributions. This is the second case where the guidance is misleading.
‘HMRC should acknowledge that their guidance is wrong, because currently we cannot rely on guidance E24. ‘The advice given is the exact opposite to what the tribunal has ruled. Example 17 says that if tips go through your troncs system then they can’t be counted as the minimum wage.’
But a spokeswoman for the Revenue said: ‘HMRC has no plans to change any of its guidance for the time being. It is one case, and we are considering the judgement to see how it affects the wider application of the rules.’
HMRC claimed that workers did not receive their entitlement under minimum wage rules between 2000 and 2003, as the restaurant staff were paid between £3 and £4 per hour through the business payroll. But a number of employees received enough money in total to be paying tax at 40%, the threshold for which is £34,600 a year.
01/10/07Action on 'unpaid' wagesA group of union members have launched High Court action claiming too much in wages was docked from their pay packets following strike action. The Unison members from a sixth form college on the Isle of Wight went on strike over pensions in 2006.
Three members claim that 1/228th of their annual salary was deducted, when it should have been only 1/260th.
01/10/07Survey shows many staff would work without payAlmost 45% of people would consider working without pay for a week or more, a survey conducted by Payroll World has revealed. Visitors to the Payroll World website were asked: ‘If your business was failing, how long would you be prepared to work without pay?’
The results revealed over 22% would work without pay for a month and 20% of people would work without pay for up to a week if the business in which they were working was failing. A small percentage of people were prepared to work without pay indefinitely – 1.2% of people.
Management author Max Mckeown, who analysed the results on behalf of Payroll World,said: ‘The figures are remarkable, and it is remarkable to think anyone would work without pay. But the figures don’t indicate whether people get job satisfaction from their role.’
He warned that employers who expect their staff to work without pay could be seen to be treating them as slaves. ‘At what point does work without pay become slavery? There is a fine line between that and loyalty,’ he said.
Payroll World’s survey categorised the lengths people would be prepared to work without pay into: not at all, one week, one month, three months and indefinitely.
Payroll World conducted the survey following the news in June’s e-Bulletin that the supermarket chain Kwik Save had gone into administration but had asked some of its employees to work without pay in a bid to save some stores. A number of employees did this but following the collapse were left fighting to receive unpaid wages.
• Visit the homepage to vote on this month’s survey - ‘How do you recruit payroll staff?’
01/10/07Alert over tampered pay details by flat-huntersProspective tenants looking for rental accommodation are providing false information in order to find a home, research revealed.
The findings published by Experian showed that around 23% of applicants enhance or fabricate their incomes in an attempt to secure rental properties, and 4% of applicants alter their employment title.
‘Many landlords insist that tenants are professionals on the basis that they will be paid well enough to afford the rent – but this leads to some prospective tenants lying about their employment status and their salary,’ said Peter Brooker of Experian.
Additional security on payslips may be the next step to combat this growing trend.
Shane Garnett, account manager at payslip provider Paragon UK, said: ‘Most payslips are laser printed, but it is possible to change details by taking the lettering off. It was also common practice with cheques, by using Blu Tack to rub it off. The same is possible with some types of payslips.
‘High-end laser printers reduce the risk of this because it burns the image into the payslip. But a desktop laser printer is easier to change.’
Payslips are cheap documents to produce and supply, making them vulnerable to misuse. The paper that cheques are written on is significantly more expensive. Cheques have three security inks, and are printed on solvent-sensitive ink paper.
Mr Garnett said that the increase in cost would discourage businesses switching to this method.
He added: ‘If there are companies behaving inappropriately we would have concerns about where they are getting stationery from.’
In July 2007 Payroll World reported that mortgage borrowers were using bogus payslips purchased online to exaggerate their income. Mr Garnett said that sites which produce payslips on demand are using ‘old style continuous forms which are in-filled on an impact printer or A4 laser printed forms. None appear to offer a pressure seal form.
‘The other flaw is that the forms are not personalised with an employer’s details. An effective counter measure to this problem could be for employers to use pay stationery that is personalised to the organisation, and for the payslip to be a pressure seal document.’
30/08/2007Civil service newcomers get moreExternal appointees to civil service jobs command up to double the salaries of their colleagues who are promoted internally, according to the Civil Service Commissioners’ annual report.
‘One area of concern is that salaries awarded to the successful candidates for the 90 external competitions we chaired did not always match those advertised. In some cases, salaries were considerably in excess of those quoted,’ the report said.
‘In two cases, the successful candidates were paid more than 60% over the base line.’
It went on to describe how eight civil servants who were successful following an open competition were paid less than the advertised remuneration.
The Government has been aware of a discrepancy in salaries since 2005 when it highlighted the risk in evidence to the Senior Salaries Review Body.
Although the commissioners reported some improvement in recruitment practice this year, they have particular concerns in three areas: salaries awarded; diversity in appointments made; and departmental compliance with the Recruitment Code.
David Penman, head of operations at the First Division Association, the union which represents senior public sector managers, said that external candidates aren’t necessarily coming from private firms but from other areas of the public sector. ‘A two-tier market is being created in order to compete with other organisations.’ He said the problem is that an individual promoted internally will never catch up someone who has been promoted externally. The annual pay rise was just 2.4% this year.
30/08/2007Gaza employees paid to stay homeFollowing reports in last months Payroll World, Gaza’s public sector employees are getting paid; but on the condition they stay at home. A rival pro-western government in the West Bank is delivering salaries to most of Gaza’s civil servants as long as they don’t work, The Guardian reported.
30/08/2007Payroll scam costs recruiters thousandsA scam in the West Midlands has cost several recruitment companies thousands of pounds. The scam consists of potential clients contacting recruitment businesses asking them to help find potential members of staff for a new contract they have won.
A potential client contacts employment businesses asking them to find labour in the engineering and technical industries because he has won a contract in the area.
The man then claims he knows several labourers he has used before and asks the recruiter if he wants to payroll them. Timesheets are then submitted, along with fake bank account details.
Recruiters are being warned to ensure they check all information provided by potential clients.
One recruiter, who was approached by the scammer, warned: ‘If you are asked to payroll for a company that you do not have a long-term relationship with, check all the details extremely carefully.
‘All the details provided to me gave me no reason to question the business. But, it seemed like too good an opportunity – and if it seems too good to be true it usually is.’
30/08/2007Wages on the up in RussiaRussia’s average monthly salary has broken the £250 figure. The average income rose to 13,810 roubles (£264) in June, according to data from the federal statistics service. Wages have jumped 750% in the past eight years. When President Putin was elected in 2000, the average monthly wage was just £25.
30/08/2007Young women earn moreYoung women in parts of the United States are now earning more than their male counterparts. Those in Dallas, Texas, aged between 21 and 30 from all educational backgrounds have earned 20% more than their male counterparts in full-time work, research revealed.
30/08/2007Public pay takes offGraduate starting salaries in the public sector have risen above their private sector colleagues for the first time, a study revealed, while another survey has shown widening pay gaps between London and the regions.
This year’s university leavers are earning an average starting salary of around £20,800, according to Graduate Pay Trends, a report by consultancy the Hay Group.
But the average salary for graduates in the public sector will be £21,445, which is 7% more than their colleagues in the private sector who will start on £20,035.
The only starting salaries higher than those of the public sector were in the oil industry where a graduate can expect to start on an average salary of £25,300.
Rob Mcpherson, reward consultant at the Hay Group, said: ‘There is an increasing trend towards professionalisation in the public sector. Management training schemes in public sector bodies such as the NHS and the civil service are paying graduates very competitive wages.’
However, the report also found that despite a rise of 2.5% since 2006, wage inflation for university leavers continues to lag behind national levels of 3.5% over the last year. The south east is also a relatively lucrative region for graduates, boasting an average starting salary of £21,022. In addition pay differentials between London and the regions have provoked debate within the legal profession.
Many solicitors based outside London complain they are being treated as secondclass citizens. Some firms offer starting salaries of up to £90,000 in London while Scottish colleagues in the same firm have a starting salary of £30,000- £32,000, according to a report in The Herald.
A spokeswoman for law firm DLA Piper, which declined to specify its starting salaries but acknowledged a difference between London and Scotland, told Payroll World: ‘DLA Piper is different because we compete not just in a national but also in an international market.
‘We are competing with other London firms and also with the “magic circle” [the most prestigious international law firms],’ she added.
30/07/07Union protests over errors in Bradford Council payClaims include double pension contributions and unpaid sick pay in ‘chaotic’ system
Some Bradford Council staff have received incorrect take home pay amid a series of errors with a new payroll system, union representatives have said.
According to Unison, errors included blank payslips, double pension contributions being deducted, payments made to people no longer with the council, and annual pay rises being delayed. It is also reported that payslips have not been sent, or have been wrong, and sick pay and other expenses have not been paid.
This follows implementation of a new payroll and HR system, Bradford-i, created by IBM. Unison branch secretary Linda Crowther told Bradford Telegraph & Argus: ‘This is another example of the chaotic failure of the Bradford-i system which has been a disaster from the moment it was introduced.’
Staff are now being urged to check their P60s. One member of staff received a letter from HMRC regarding a tax rebate she was not entitled to. Another member of staff was contacted by the Benefits Agency over extra working tax credits, due to a lower wage showing up on the P60.
But the council told Payroll World that the problem appeared to be limited to a small number of staff who joined the authority part way through the year.
The council’s strategic director of corporate services, Becky Hellard, said that the problems may have occurred because the new payroll system has been implemented in phases, with the last phase going live on 19 April 2007. ‘Bradford Council is a complex organisation with five different payroll periods and 1,800 different payroll schedules for its 21,000 staff,’ she said. ‘Some members of staff who joined during the 2006/07 financial year require revised P60s and this affects 166 staff out of the 21,000 whom we pay.’
The council said that it had been contacted by fewer than a dozen members of staff with complaints – but that these all turned out to be down to the new format of the P60s being misread.
03/07/07IPP warns on use of bogus payslipsMortgage borrowers may be using bogus payslips purchased online to exaggerate their income.
Experts have warned that the rise will lead to borrowers taking out mortgages and loans they cannot afford. Claimants are able to obtain fake salary details after an increasing number of sites offer to print them without checking whether they are telling the truth about their earnings.
Carrying out a simple Google search for a duplicate P60 will lead you to a number of sites where you are able to get one for £30.
Maurice Cheng, chief executive of the Institute of Payroll Professionals, told Payroll World: ‘For a ridiculously small amount you could get yourself into a huge amount of trouble because you can put whatever you like in it; it’s a complete fantasy.’
Companies offering the service cannot verify if an applicant is telling the truth, because employers and tax officials are bound by the Data Protection Act.
Surprisingly there is no legislation against this and the actual action of purchasing a replica payslip is entirely legal. However, Mr Cheng added: ‘Very few people are going to have them to hang on their walls.
There is no reason after all why you should need a replica unless you intend to use it and that’s when it becomes fraud.’ He urged financial services organisations to be ‘more stringent about checking as this might make people think twice.’
And he added: ‘We are concerned that the companies use genuine payroll software and must be using trained payrollers to process the information. If any of our members were found to be involved in such practices we would discipline them immediately.’
The websites include disclaimers insisting the forms should be used for legal purposes only.
03/07/07School support staff to have pay reviewMinisters make move towards formal status for teaching assistants
The Government is taking forward plans to standardise national pay and conditions for school support staff in England. Education Secretary Alan Johnson has commissioned a working group to recommend a new employment structure.
Unions which have responsibility for half a million support staff in England’s schools welcomed the review. Brian Strutton, GMB national secretary, said: ‘For teaching assistants, school secretaries and all other non-teaching roles this will bring consistency and fairness to match their growing role and importance in schools.’
Christina McAnea, Unison national education secretary, added: ‘Many school workers’ pay does not in any way reflect the job they do and it is determined almost at the whim of the head teacher.’
Speaking to Payroll World, Ms McAnea said the announcement was a major step forward for unison’s campaign. Asked why the unions’ campaign for a consistent pay structure had taken so long to reach this stage, she said: ‘It is mainly because local government authorities were nervous about it. The drive in local government is to keep things as local as possible. They have accepted this development but don’t accept it is needed.’
If the plans fail to go ahead the alternative will create greater problems according to Ms McAnea: ‘The worst-case scenario is that these plans do not go ahead. Then we will have to negotiate pay individually across 23,000 schools which will be a huge waste of time and resources for everyone concerned.’
But there are some concerns that a national system will not reflect the local context. One teaching assistant told Payroll World: ‘I started on a cleaner’s wage but have gone up to the wage of a newly qualified teacher. The needs in each school are very different; some schools have a greater need for teaching assistants and more is required of them, so they are rewarded accordingly.
‘I look at some job adverts and they are not expected to do what I can do, so how can it be rewarded in the same way?’
03/07/07Call for employers to tell staff about wagesEmployers should be more open about staff salaries, to help overcome biases in pay patterns and to help employees understand the value of their packages, a conference heard last month.
The message came from Charles Cotton, adviser on reward and employment conditions at the Chartered Institute of Personnel & Development. ‘A third of employers gag their staff [from divulging their pay],’ he said in the keynote speech at Communicating Employee Benefits conference on 13 June.
‘There might be an issue in certain sectors around poaching, but in other cases it may be that there is no rationale for pay rates, and the organisation would feel uncomfortable justifying them,’ he added.
He said that too often in UK organisations, employers make pay awards for short-term political reasons. This can result in uneven patterns of pay, not reflecting skill or performance levels. And Mr Cotton reminded delegates of the promise by David Cameron, Leader of the Opposition, to outlaw ‘gagging’ clauses if the Conservatives win power.
Even without legislation, there can be negative effects for employers when there is limited information on pay. ‘Poor communication does have an impact on employee engagement,’ he said.
By contrast good communication can not only help individuals understand the value of non-cash benefits, but can drive up participation in schemes such as childcare benefits and pensions. He highlighted how the designer clothing firm Gap had used its advertising skills to market the pension scheme to its staff, leading to a significant increase in participation.
Also at the conference, organised by Symposium Events and chaired by Payroll World editor Philip Whiteley, delegates heard that payslip flyers are often the most effective way of communicating to staff information about benefits.
Vickie Pooley, group benefits manager at WH Smith, said that after formal evaluation the payslip flyer had proved to be the most effective means of generating interest in the firm’s childcare scheme.
03/07/07Minimum wage improves living standardsBritain’s lowest-paid workers have enjoyed a bigger improvement in their standard of living since 2003 than those in any other European country.
Research by the European Trade Union Confederation also revealed that the introduction of the minimum wage has encouraged a rise in the numbers of workers entering Britain from Eastern Europe and Portugal where wages are significantly lower.
The research revealed that workers on the minimum wage had seen a significant rise in their purchasing power, by 18.8% over the four-year period. This compared with Spain and Luxembourg which saw an increase of 18% and 17.4% respectively. Britain’s big increase has narrowed the gap between the minimum wage and average wages.
There were five countries, Latvia, Poland, Portugal, Malta and, surprisingly, France where increases in the minimum wage have failed to keep up with inflation.
The report’s findings suggested that: ‘The fact that wages will continue to differ substantially across Europe in the years to come means that wages will continue to be a potential driver of relocation processes as well as an argument by employers in high-wage countries for wage moderation and other concessions.’
Britain’s decision to introduce a minimum wage has had an impact in other European countries. Germany is now considering introducing a pay floor.
The minimum wage is currently £5.35 an hour for adults but is due to rise to £5.52 in October
03/07/07Tougher rules to enforce pay floorThe Department for Trade & Industry has announced plans to crack down on employers not paying the minimum wage. Trade & Industry Secretary Alistair Darling said that the Government will target ‘cheating’ employers with a new regime of fines.
The tougher regime had been outlined in the Pre-Budget Report ( Payroll World, January 2007).
HMRC, which has responsibility for implementing the legislation, said it had previously chosen not to pursue criminal prosecutions, preferring to issue enforcement penalty notices against wayward employers. But indicating that it will be taking a tougher stance, an HMRC spokeswoman said: ‘We will be on the look out for cases.
Where there is systematic re-offending, or if an employer refuses to comply with HMRC officers, we will come down hard,’ she said.
The new regime of fines will be introduced following consultation. It will mean that employers that fail to comply
will be issued with additional penalties.
Mr Darling said: ‘Paying less than the minimum wage to workers isn’t only unfair to workers, it’s unfair to the vast majority of employers who obey the law, because it lets rogue businesses undercut them.’
Figures from May showed that HMRC had conducted more than twice as many investigations of employers than there were complaints, a sign that the new tougher stance is in force.
One of the most highprofile minimum-wage cases was settled earlier this year after Butlins workers received more than £1m in back pay. Although they were receiving more than the minimum wage, a deduction to pay for electricity if they lived on site took them below the threshold.
HMRC has carried out around 45,000 investigations into employers that pay less than the minimum wage, since the legislation was introduced in 1999.
Deputy general secretary of the GMB Debbie Coulter told Payroll World: ‘While some receive the minimum rate in theory, others can be subjected to unlawful deductions from their pay packets, for things like travel and sub standard accommodation, which leave them below the threshold.’
01/06/2007Nurses suffer in pay blunderA payroll blunder left nurses working shifts without their wages for several days last month. The problems were a result of the implementation of a new payroll system.
Those working shifts for the University Hospital of Leicester NHS Trust nurse bank suffered delays waiting to be paid. Health workers swamped a helpline with calls while the problem lasted.
One nurse said that despite submitting timesheets within set deadlines, cash for shift working was not paid on time. She told the Leicester Mercury: ‘I am furious. I have been in touch with Capita and was told it was sitting in the pile waiting to be done but that they were dealing with thousands of queries.’
A spokeswoman for the Capita Group said: ‘During the transition to a new payroll service at University Hospitals of Leicester NHS Trust and Leicester City Primary Care Trust, we have identified particular issues with a number of employee payments.
‘These issues have now been resolved and all the appropriate payments have been made to staff. Capita has reviewed its processes with the Trust to ensure future payments are made on time and in full.’
01/06/2007Average earnings growAverage earnings growth unexpectedly slowed in the three months to March, Government data showed, easing concerns over inflation risks from rising wages. The Office for National Statistics said pay, including bonuses, rose by 4.5% in the first quarter of the year, slowing from 4.6% in the previous quarter.
01/06/2007Minimum wage ‘lowers sickness’The national minimum wage has helped boost productivity as well as wages because it has led to a fall in sickness absence, according to new research.
The study, published at the Royal Economic Society’s annual conference at the University of Warwick, said low-paid workers were more likely to take sickness leave than staff on higher wages.
01/05/07Council unlawfully deducted wagesNorth Lanarkshire Council has been ordered to pay up to £150,000 in compensation to more than 50 concierges after denying their right to a paid lunch hour. The council had argued that the workers were not entitled to fully paid lunch-breaks as a result of an agreement to work a reduced 39-hour working week in April 2000.
01/05/07BA staff accept pay dealBritish Airways cabin crew have voted to accept a deal on pay and pensions that had threatened to trigger a number of strikes earlier this year. T&G union members voted 3-1 to back an agreement worth 18.75% in pensionable pay and accepted changes with BA’s £2.1bn pension scheme deficit.
01/05/07IPP welcomes rise in minimum wageThe Institute of Payroll Professionals has welcomed the Government’s announcement to increase the National Minimum Wage by 3.2% from £5.35 to £5.52, which will be effective from October 2007.
‘Increasing the minimum wage is obviously good news for employees, albeit a further cost on business,’ comments Karen Thomson, head of policy and research at the IPP.
02/04/07Payroll handles fall-out in councils’ equal pay crisisLocal authorities are struggling to fund equal pay deals arising from the single-status agreement, which demands equal pay for all work of equal value. The most significant liabilities are in the West Midlands (£928m), Yorkshire & Humber (£371m) and the North West (£740m).
The crisis has arisen from an equal pay deal reached a decade ago between unions and councils. In it, councils said they would end differentials between jobs filled mainly by women and better-paid roles taken mainly by men. The deadline for implementing single status agreements ran out on the 31 March 2007, with more than half of all councils still to meet its terms.
Kate Upcraft of ISIS Support Services, said: ‘It’s unbelievable that this has been allowed to happen. Councils have had plenty of time to budget for equal pay.’ She added the equal pay crisis would hit payroll departments as they struggled to work out back-dated pay for thousands of women workers. ‘Administratively, it’s big deal for payroll as they have to deal with back-dated earnings individually and arrange for new pay and amend all the administrative records.’
No-win no-fee cases backed by European judgments have meant that low-paid women must get more from April and that they must receive increases backdated by six years.
Jan Parkinson, managing director of Local Government Employers, said: ‘Councils are working hard to implement equal-pay structures in a tight financial environment.
Unfortunately, their efforts to do this in partnership with the trade unions are being undermined by the activities of no-win no-fee lawyers,’
The Times reported that up to 250,000 men and some white-collar women could have their salaries cut, in some cases by £15,000 a year, as jobs are re-evaluated.
One council that has prepared in advance for the onset of equal pay agreements is Kent County Council. It implemented single status as part of a reward strategy agreement with unions which encompassed equal pay in April 2004, said Colin Miller, reward manager at the authority. ‘A project team was established to develop and deliver this which included personnel business support, payroll and our recognized trade unions,’ he told Payroll World. ‘The opportunity was taken to modernize the design of our existing pay scales to incorporate the former manual populations.
Individuals were transferred on to the appropriate grade using our established mechanism of job evaluation. A bonus was paid on transfer.’ The councils’ umbrella body, the Local Government Association (LGA) called on the Treasury to loosen borrowing rules to allow councils to take out long-term loans to cover their costs rather than piling them on to council tax bills.
30/03/07Cameron backs ban on 'secret' salariesThe Institute of Payroll Professionals (IPP) has backed calls by the Conservative Party for bosses to be banned from forcing employees to keep their salaries secret from colleagues.
David Cameron’s party believes outlawing contracts that effectively gag staff could help close the pay gap between men and women.
He argued that confidentiality clauses contribute to the 17% pay gap and ‘inhibit effective and informed pay bargaining’.
Maurice Cheng, IPP’s chief executive, said that the concept of bosses preventing their staff from talking about their salaries to colleagues is outdated. He noted: ‘If an employer has nothing to hide in this area then they should not fear open discussion. Salary details belong to the employee as much as to the employer, and therefore they should have the right to talk about it. To restrict them is really an infringement of their personal rights and freedom of speech.’
About one in three employers orders staff not to discuss pay with colleagues.
28/02/2007Details of minimum wage clampdown announcedA crackdown to ensure employers are paying staff at least the national minimum wage has been announced by the Government. Companies are expected to face tougher financial penalties if they are caught breaking the law.
The Government crackdown follows the Pre-Budget Report announcement of a 50% increase in resources to enforce the minimum wage regulations (see Payroll World January 07, p17).
Last year, more than 1,500 employers were exposed for not paying the minimum wage to more than 25,000 workers.
Now the Department for Trade & Industry has warned bosses who refuse to comply with HMRC enforcement teams that they will face a financial penalty after seven days, regardless of the reason for the infringement.
The Confederation of Business Industries (CBI) backed the move. ‘Firms who pay staff less than the minimum wage are not just acting unlawfully, they are undermining the vast majority of law-abiding employers,’ said Susan Anderson, CBI’s director of HR policy.
‘It is therefore right that those firms who have been given ample opportunity to pay their arrears and fail to do so should be penalized, and the CBI supports the Government’s resolve to issue penalty notices to firms that fail to comply with enforcement notices.’
01/02/2007Expense abuse costs £150m, European survey showsAbuse of expense claims are costing businesses more than £150m every year, according to a survey of 958 companies by Software Europe.
Responses from the blue chip companies and Government agencies revealed that UK businesses spend £3.1bn annually on employee expenses. But lax procedures, widespread abuses and errors are leaving them open to huge tax bills and lost profits, the survey found.
The research concluded that nearly 5% of all travel and entertainment claims were overstated.
The most common expense abuses were inconsistent mileage claims, duplicate claims that were paid twice and non-work related meal allowance claims. Where there was no explanation for refunded expenses, HM Revenue & Customs were classing the claims as benefits in kind and charging companies with additional tax bills.
One company surveyed said that it had received a £150,000 tax bill because of insufficient details to justify expense claims.
Keith Cossey, independent payroll consultant and Payroll World columnist, said: ‘A lot of expenses are not looked at properly because people trust their employees. Questioning the expense would mean questioning the employee. There needs to be more diligence. Companies need to do thorough periodic checks.’
Software Europe claimed that 40% of companies were more vulnerable to fraudulent claims because they used paper forms, whereas one third of businesses used sophisticated software allowing them to compare details and identify inconsistencies.
01/02/2007Immigrants 'do not depress UK wages'Migrants from Eastern Europe are not responsible for the rise in unemployment rates or for pulling down wages, according to a report by the Bank of England and the Monetary Policy Committee.
The paper opposes the idea that the 0.8% rise in unemployment levels over the past 18 months is due to migrants from the eight accession (A8) countries – Poland, Hungary, Slovakia, Slovenia, Latvia, Lithuania, Estonia and the Czech Republic.
It also says that there is ‘little or no evidence’ that migrants come to the UK to claim benefits. Many have found work in construction, hospitality and agriculture.
Since 2004, about 500,000 migrants have entered the UK from the A8 countries. These migrants have had many positive effects on the economy, from reducing inflationary pressures by increasing demand, to reducing the natural rate of unemployment.
The report follows the entrance of Romania and Bulgaria into the EU last month.
The Chartered Institute of Personnel & Development agreed with the findings of the report. ‘Migrants from A8 countries are mostly taking jobs that would not be filled. The majority are productive, committed and they help to keep wage inflation in check,’ said the CIPD chief economist John Philpott.
He continued: ‘They are sampling the work and life opportunities in the UK. As the economy in their countries rise, they will be able to enjoy what we have here.’
01/02/2007
Payroll World
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