What’s Changing

The Job Titles function has been amended to record when it is applicable that a job may be an Apprentice position and to provide new functionality for compliance with the National Living Wage (NLW) legislation. 

There is no immediate impact on release of this work. You will be responsible for updating the new fields to record if Apprenticeships are applicable and for ensuring that your employees are paid appropriately under the new legislation for NLW.

If any technical issues are encountered with the new export, please raise a Technical Case with our Support Team regarding the issue. To do so, either escalate to the member of your business who is responsible for raising cases with Fourth or raise a Technical Case in the Customer Community.


Proposed Release Date: 21-Jan-2016
 

Reason for the Change

From the start of the new tax year on 6th April 2016, HMRC are introducing a new National Insurance (NI) category (category H) for Apprentices under the age of 25.

In order to be able to accurately determine if an employee should pay NI under this category, it becomes essential to record whether an employee is an Apprentice.

We will be introducing a new National Insurance (NI) category (letter H) prior to the start of the new tax year. That change is not in this release.

As the Employer’s National Insurance rate for category H is 0% under the Upper Earnings Limit (UEL) as opposed to 13.8% for category A (the most common category). Therefore there is a financial advantage for you to ensure that anyone you employ is accurately indicated as an Apprentice before the start of the new tax year on 6th April 2016. As part of your portal rolled over into the tax new employees’ NI category will be amended as appropriate for anyone flagged as an Apprentice who is under 25 years old.

The legislation for National Living Wage (NLW) comes into effect from the 1st April 2016 (note this is not the start of the tax year on the 6th), you should be compliant from this date. The new NLW rate of £7.20 an hour applies for workers aged 25 and older. The minimum wage rates effective from 1st October 2015 will still apply for workers aged 24 and under.
 

Customers Affected

All customers with the HR and or Payroll Module.
 

Release Notes

Apprentices

• Go to HR > Company Admin > Job Titles {select job title}

On the relevant Job Titles you should indicate to “Allow Apprentices”. When set to yes this simply enables the ability to record that an employee who is associated to this Job Title is an Apprentice and the dates for which the apprenticeship is applicable on the Employment details screen. See below:
 

 

Employment Details

• Go to HR > Employee List {select employee} > Employee Info > Employment Details

Is this example, where the employee is associated to the “Chef” (as above) job title, the Apprentice fields are available and have been completed for this employee.
 
The Apprentice fields are not mandatory for all employees that are associated to the Job Title where “Allow Apprentices” is set to yes, it just becomes an option. Where it is not applicable the “Apprentice?” indicator should be left blank, as below: 
 
When a job title is selected for an employee and the Job Title has “Allow Apprentices” is set to no, upon saving the user will see the following warning message:
   

Amending the Apprentice on the Job Title

• Go to HR > Company Admin > Job Titles {select job title}

If it is no longer applicable that a Job Title can have an Apprentice associated, you may amend the “Allow Apprentices“ setting to No; unless there are employees that are still actively employed that are current Apprentices i.e. the Apprentice? Field is flagged on the Employee Details screen.

 

National Living Wage (NLW) rates

• Go to HR > Company Admin > Job Titles {select job title}

Currently you “Link Rates of Pay” by selecting the following option and when selected the current bandings are displayed:
 
The “Link Rates of Pay” option has been moved as below (previously a tick box in the Edit Job Title section on this screen):
When this option is selected you will see all the bands for National Minimum Wage and National Living Wage. There are two new bands (applicable for Hourly, Shift and Salary):

1. Apprentice – This rate is for Apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other Apprentices are entitled to the National Minimum Wage for their age
2. Over 25 – For workers aged 25 and older in order to comply with the NLW rules that come into effect on 1st April 2016. The minimum wage will still apply for workers aged 24 and under

As a result of this, bands (applicable for Hourly, Shift and Salary) that previously existed have been re-labelled as follows:
 

Previous Label	New Label
Under 21	21 to 24
Over 21	21 to 24

   

Updating Data for National Living Wage 

 

Link Rate of Pay Bands on Job Titles

 

• Go to HR > Company Admin > Job Titles {select job title}

For each Job Title you should review existing values and update the new bands to ensure that appropriate values are stored that apply to your business for every band. 
 

National Minimum/Living Wage Bulk Updates:

 

• Go to HR > Employees > NMW/NLW Rate Update

The menu option has been renamed to “NMW/NLW Rate Update”.

The Bulk update has been enhanced to take into consideration the two new bands added (as described above). The rates for each band will be updated at the appropriate point when the legislation comes into effect for both NMW and NLW.

The latest updates have been made, are as follows:

• NMW – Effective from 1st October 2015 (updated in a previous release on 17/09/2015):

• NLW – Effective from 1st April 2016 (updated in this release):

When you run the bulk update and select the effective date the rates will be updated for either NMW, NLW or both, dependent on the date you select.
 
The results can be viewed on the preview before making the live update, as before.
 

Also See

• National Minimum Wage Update Functionality 2015