Release Notes WFM: NMW NLW for Tax Year Export Bureau

What’s Changing?

The Payroll module reporting function has been amended to introduce two new exports to assist with National Minimum Wage and National Living Wage (NMW/NLW) checking.

The two versions of the export available are the 'NMW/NLW for tax year 2019' and the 'NMW/NLW for past periods'. 

The 'NMW/NLW for tax year 2019' export completes the calculation based on the payments/hours in the current pay period/payroll at the time it is run. Any rotas in the current pay period which are not submitted to payroll at the point of running the report, will not be included in the calculation. 

The 'NMW/NLW for past periods' export completes the calculation based on the payments/hours in a previous period. The required period can be selected when running this report. This report can be used for audit purposes but could also be used during the next pay period, for any payrolls which are closed prior to the end of the pay period and would not, therefore, have all of the hours worked in the system at the time of closing.
 

Reason for the Change

The new exports have been developed to help to identify any potential areas of non-compliance with NMW/NLW legislation based on your configured payment types.  If your payment types are not configured, the exports will include all payments in the calculation of NMW/NLW.

Customers Affected

All customers with the payroll module.

Release Notes

User Access

Access to the NMW/NLW Exports will require access to view exports. This can be assigned to employees with bespoke access or through access templates and is simply the permission named ‘exports’ within the payroll module. Please note that enabling this permission will provide the user with access to all exports sitting within your payroll module.

Should you require any guidance on assigning access, please speak with your HR Administrator.

Configuration

The exports use all payment types in the calculation by default. In order for the calculation to be completed based on the guidelines set by HMRC, some configuration is required within the portal.

See - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/514897/BIS-16-144-nmw-calculating-the-national-minimum-wage.pdf

Please review the payment types in the portal by running the payment types export:

• Payroll Module > Reports > Exports > Payment Types > Run Export

Column J ‘Exclude From Minimum Wage’ is set to ‘FALSE’ which means that the payment type is included in the NMW/NLW Exports.

Please highlight the payment types that you wish to be excluded from the NMW/NLW Exports and send to your Payroll Specialist within the Bureau via email, using Payroll@Fourth.com

Your Payroll Specialist will then configure your portal to exclude these payment types from the calculation used when running the exports.
 

Contracted Hours

The NMW/NLW Exports use contracted hours held within the employee’s employment details page to calculate the actual hourly rate for salaried employees by default. Therefore, you must ensure that the salaried employees contracted hours are accurate and any updates are made within this page also. To enable the contracted hours option you will need to enable the global setting:

• HR > Administration > Global Settings > Edit Default Employee Settings > Display Contracted Hours > choose Mandatory which will force Managers to update this option.

To update employees contracted hours:

• HR > Employees > Employees List > select/search the employee > Employee Info > Employment Details > See Contracted Hours > update with hours the employees works > Save

NMW/NLW Exports

The exports can be found in Payroll > Reports > Exports> NMW/NLW for tax year 2024/NMW/NLW for past periods

To run the exports, a company and pay basis should be specified.

• Company - Only a single company can be selected
• Location - A specific location or all locations applicable to the company can be selected
• Division - A specific location or all locations applicable to the company can be selected
• Pay Basis - Only a single pay basis can be selected
• Pay Run (Past periods report only) - Only a single pay period can be selected
• Show all employees – when ticked all employees will show on the report including those who it is suggested do not require any top up. This will then allow the user to review all employees and make a decision as to whether they are compliant with NMW/NLW
• Use Rota hours for salaried employees - when ticked, the report will use the hours recorded on the rota within the pay period for salaried employees rather than the contracted hours. If any employee is not included on the rota, the report will default to using the contracted hours in the employee details page.

You will then have the option to run the export or reset the selection criteria.
 

Calculations and Column Definition

The exports cover different employee types, however the calculations for each are specific. National Minimum/Living Wage is calculated based on the number of hours worked.
 

Considerations

Due to the complex legislation surrounding the calculation of National Minimum and National Living Wage, this export should only be used as a guide to help ensure employees are being paid the minimum or above.

The following aspects may not be included in the calculations, depending on the configuration of the portal:

• Employees paid an annual salary and contracted to work shifts
• Pro Rata Salaries due to employee age changes, apprentice changes or minimum wage rate changes
• Holiday pay for salaried employees 
• Any aspect of employee pay that is not available within the payroll calculations that may impact their calculations.

Any employees flagged as being below the National Living Wage should be reviewed according to their circumstances, and top-up payment amounts applied, if necessary

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.