Employment and HR update 6/01/2020

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Employers cautious over steep 2020 minimum wage rises

From the start of April 2020 low paid workers will benefit from a rise in the minimum wage that is four times the rate of inflation, in what the prime minister has called the “the biggest ever cash boost” to the legal pay floor. 

Johnny Runge, senior social researcher at the National Institute of Economic and Social Research, warned against the national minimum wage becoming a political tool:

“It’s vital that the Low Pay Commission has the full range of tools at its disposal to judge the evidence base, pace and affordability for any future rises to ensure the UK’s successful job creation story continues into the coming decade.”

Workers aged 21 to 24 will receive 50p an hour more with their hourly rate rising from £7.70 to £8.20 (a 6.5% rise) while the national living wage, which applies to those aged 25 and over, will gain a rise from £8.21 to £8.72 (a 6.2% rise).



Health conscious – does a fit workforce mean a happy workplace?

With the average employee spending a third of their lives at work, employers – helped by occupational health – have a pivotal role to play in communicating, facilitating and enabling lifestyle change that will stick, as Iain Thomson explains. And it’s not just the physical; an unhealthy lifestyle and poor diet has also been shown to increase mental health issues such as anxiety, depression and poor self-esteem. To help tackle obesity and create a happier, fitter and more productive workforce, business leaders should listen to the advice they get from OH and throw their weight behind promoting healthy habits and behaviours.


FTSE 100 bosses will have earned an average annual wage by 5pm TONIGHT, study reveals

The report said high pay will be a key issue in 2020 as this is the first year that publicly listed firms with more than 250 UK employees must disclose the ratio between chief executive pay and that of their average worker, and explain the reasons for their executive pay ratios.

 Top bosses will have earned the average annual wage by 5pm tonight.

Tim Roache, GMB General Secretary, said: ‘It should be a source of national shame that in just a handful of days, company fat cats will have made more money than the typical UK full-time worker will earn in the entire year.’

Peter Cheese, chief executive at the CIPD, said: ‘This is the first year where businesses are really being held to account on executive pay. Pay ratio reporting will rightly increase scrutiny on pay and reward practices, but reporting the numbers is just the start.

‘We need businesses to step up and justify very high levels of pay for top executives, particularly in relation to how the rest of the workforce is being rewarded.

‘Greater fairness and openness in pay is essential in building trust, amongst employees as well as external stakeholders and investors.’


Executive pay ratio reporting an ‘opportunity’ to win employees’ trust

Executive pay ratio reporting an ‘opportunity’ to win employees’ trust. The CIPD and thinktank the High Pay Centre said the pay ratio regulations, which came into force on 1 January and apply to UK-listed companies with more than 250 employees, should be treated as an opportunity for organisations to explain their senior executives’ pay levels and showcase what they are doing to ensure pay practices are fair. 

Luke Hildyard: “New reporting requirements mean that publicly listed firms will have to be more transparent over how and why they reward their CEOs relative to the wider workforce.”

The new regulations make it a statutory requirement for the UK’s largest employers to disclose how their chief executives’ pay compares to the median, lower quartile and upper quartile pay of their UK employees. Their annual reports must also include reasons for any year-to-year reductions or increases in ratios, how they have calculated their ratio and whether or not the organisation believes the median ratio is consistent with the organisation’s wider policies on pay, reward and progression.

Companies must also explain how their directors take employee and other stakeholder interests into account when setting pay scales, while large private sector firms need to report on their corporate governance arrangements.