The Payroll module reporting function has been amended to introduce a new export for National Minimum Wage and National Living Wage (NMW/NLW) compliance.
There will be an immediate impact on the existing National Minimum Wage Compliance Report and the National Minimum Wage Compliance (Shifts) Report which will be removed from the People System and replaced with the new NMW/NLW Compliance Export.
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: 9th June 2016
Reason for the Change
National Living Wage (NLW) became effective from 1st April 2016, people system has already been updated to enable compliance with NMW/NLW.
This new export has been developed in order to be able to provide consolidated guidance on employees who may be at risk of non-compliance with NMW/NLW legislation. The export defaults to all payments included in the calculation of NMW/NLW unless the payment type has been excluded in the calculation.
All customers with the Payroll Module.
Access to the NMW/NLW Compliance export will require access to 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 this will give access to all exports sitting within your Payroll module.
Should you require any guidance with assigning access, please liaise with your Fourth contact to have this this setting applied.
High level release notes sent out on Friday 3rd June 2016 to our In-House Payroll customers included details of how to configure HR & Payroll to ensure that only the payment types that count toward minimum wage are included in the calculation. For our Payroll Bureau customers, please contact your Payroll Specialist in the Payroll Bureau if you have any queries on what is included.
The NMW/NLW Compliance export uses contracted hours in the employee’s 'Employment Details' page to calculate salaried employee’s hourly rate. Therefore you will need to update salaried employees contracted hours. To enable the 'Contracted Hours' option you will need to enable the Global Setting:
- Go to HR > administration > Global Settings > edit default employee settings > Display Contracted Hours > choose Mandatory which will force managers to update this option
To update employee's contracted hours:
Go to HR > Employees > Employees list > select/search the Employee > Employee Info > Employment Details > see Contracted Hours > update with hours worked by the Employee > Save
NMW/NLW Compliance Export
The new Export can be found in Payroll > Reports > Exports> NMW/NLW Compliance
In order to run the Export, a Company and Pay Basis should be specified.
- Company - Only a single Company can be selected
- Location - Can specify Location or select all Locations applicable to the company
- Division - Can specify location or select all Locations applicable to the company
- Pay Basis - Only a single Pay Basis can be selected
- Show all employees – When ticked, all employees will show on the report including those who are compliant. This will then allow the user to review all employees and make decisions
You will then have the option to run the export or reset the selection criteria.
Calculations and Column Definition
The export covers different employee types, however the calculations for each are specific. National Minimum/Living Wage is calculated based on the number of hours worked.
What the Export does not include.
1. Employees paid on an annual salary and contracted to work shifts
2. Proration – Where Employee’s Salary or Rate, Employee's Age, Apprentice Status or National Minimum/Living Wage changes can be found. Employers should review both employee circumstances and NMW/NLW legislation to manually check if the employee has been paid at least NMW/NLW rate within that pay period. This will be automatically calculated going forward