Originally written by Timothy Adler on Small Business
The government has backed down in a row with businesses over the minimum wage.
Businesses that inadvertently push employees below the minimum wage by offering voluntary savings and benefit schemes to staff will no longer be fined.
>See also: Tory minimum wage pledge ‘not realistic’ for businesses, says IoD
The Department for Business, Energy & Industrial Strategy (BEIS) said that companies offering salary sacrifice schemes – where employees exchange part of their pay in return for benefits such as childcare vouchers or other products – technically pushing employees below the minimum wage, would no longer face financial penalties.
Business minister Kelly Tolhurst said: “We want to make it as easy as possible for employers, especially small businesses and those trying to do right by their staff, to comply with National Minimum Wage rules, which is why we’re reforming regulations.”
>See also: Protecting employees from overworking and minimum wage underpayment
Previously, HMRC pursued supermarket Iceland for a tax bill of over £20m after it allowed staff to voluntarily join its Christmas Club savings scheme, which pushed some pay below the minimum wage.
The business department also said it would relaunch its “naming and shaming” of employers who breach minimum wage rules.