Your essential weekly employment law & HR briefing. This week we focus on the pitfalls of pay averaging, rising absence rates, employer concerns about the economy, improving staff retention and the positive effect Brexit could have on TUPE.
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National minimum wage: Avoid the pitfalls of pay averaging
John Lewis, perhaps Britain’s most well-known department store, reportedly set aside £36m to compensate for potential breaches of the national minimum wage earlier this year.
The potential breach came as the result of the department store’s policy of ‘pay averaging’ – a practice which involves calculating a worker’s annual pay and paying it out in monthly instalments regardless of how many hours are worked in particular months.
Pay averaging can be beneficial for both employers and employees: facilitating increased budget stability for the business and creating wage consistency for the employee.
However, regardless of the supposed stability that pay averaging encourages for employees, a company could be in breach of national minimum wage legislation if a worker’s pay, when divided by hours worked, is beneath the minimum wage.
In this article, Personnel Today discuss the issues with pay averaging and suggest ways to avoid a minimum wage breach.
Absence rates on the rise, according to XpertHR
Employee absence has risen to a median of 6.6 days per employee, this means employers are losing a median 2.9% of working time to absence.
The rise in absences, seen more prolifically in larger organisations, is estimated to cost employers an annual average of £455 per employee in cover.
Sheila Attwood, managing editor of the body that conducted the study said, ‘High levels of employee sickness absence represent a significant financial cost to the business, and can have an impact on its operations and the wellbeing of those having to cover for absent colleagues.
Employers should use the data they collect on absence rates to be proactive in effectively managing absence in their organisation’.
Read more about rising absence rates.
Employers concerned for future of the economy
A recent report by JobsOutlook found that UK employers are becoming increasingly worried about the economy.
Just 28% of those asked expected the economy to improve. This pessimism displayed by the employers surveyed could potentially be linked to a wider sense of doubt and uncertainty about the British economy post-Brexit.
However, REC chief, Kevin Green, stresses that low confidence among employers should raise a red flag, ‘Businesses are continuing to hire to meet demand, but issues like access to labour, Brexit negotiations and political uncertainty are creating nervousness. Employers in the construction sector are especially concerned as they rely heavily on EU workers to meet the growing demand for housing and to support the government’s infrastructure plans’.
Read more about how uncertainty is leading to pessimism among British employers.
Five steps to better staff recruitment and retention
Is recruitment and retention something you struggle with? With employees feeling increasing comfortable moving between competitors to further their careers, ensuring that you hire the right talent and retain your key players is essential.
Whether it is understanding the potential risks your business could face when hiring a new employee or ensuring your employment contracts are fit for purpose; by following best practices and implementing the right policies, you can help to ensure your business is best placed when recruiting or when an employee leaves.
In this article, People Management suggest five steps that businesses can take to better recruitment and staff retention.
A TUPE manifesto for post-Brexit Britain
The Transfer of Undertakings (Protection of Employment) Regulations protect the existing employment rights of employees by ensuring that an employer, who inherits employees under TUPE, honours their terms and conditions of employment.
Of course, these regulations are in place to ensure that there is a level of protection for employees. However, Tim Cross writes in People Management that the reforms leaving the EU would allow could enable greater business efficiency.
Read more about how tweaks to TUPE following Brexit could be beneficial for employers.