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Unintended consequences?
Key points
- Non-compliance with NMW rules is usually technical in nature involving salary sacrifice arrangements.
- It is important for advisers to address some potentially unintended consequences of the NMW rules.
- HMRC recently suggested in an investigation that rather than disallowing the proportion of a salary sacrifice attaching to the allowable elements of employee’s salary the entire sacrifice including the amount relating to disallowed payments should be disallowed.
- Make sure contracts are drafted in accordance with the way that the hourly rate is calculated.
- An employer that pays a periodic performance bonus in addition to a salary as a salaried hours worker could find itself in breach of NMW if the worker is reclassified as ‘unmeasured’ as defined by the 2015 Regs.
- Pay careful attention to any policy wording surrounding dress requirements at work.
- In certain circumstances amounts deducted for employee accommodation can be treated...
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