| HR & EMPLOYMENT LAW
Jackie Le Poidevin, Editor-in-Chief, HR Adviser |
What Could the Flexible Working Bill Mean for Your Organisation?
A bill designed to strengthen employees’ ability to work flexibly has passed its second reading in the House of Commons with government support. Read on to discover what rights your employees would have if the bill becomes law and if there’s anything you can do to prepare for the proposed changes.
The Employment Relations (Flexible Working) Bill joins several other private member’s bills that have been introduced recently by backbench MPs in an effort to get stalled government reforms onto the statute books. Such bills normally have little prospect of becoming law but government backing makes it much more likely that they’ll be enacted.
The Department for Business, Energy and Industrial Strategy’s consultation on ‘Making flexible working the default’ closed on 1 December 2021 but the government has yet to issue its formal response to this. However, Yasmin Qureshi, a Labour MP, has now introduced a bill which would make the following changes to the statutory regime:
- Allow employees to make two statutory requests in any 12-month period (currently, they can only make one).
- Require employers to complete the decision-making process within 2 months (rather than 3 months).
- Require employers to consult with the employee before rejecting a flexible working request.
- Remove the requirement for the employee to explain how the arrangement would work.
The bill doesn’t propose changing the current requirement for an employee to have 26 weeks’ continuous service before becoming eligible to make a request. However, it’s possible secondary legislation could be introduced making it a Day 1 right to request flexible working.
How to Prepare for any Changes
You don’t have to do anything right now as it’s not certain the bill will become law. It’s already good practice, as laid out in the Acas Code of Practice on flexible working, to consult the employee and try and reach a compromise before making any decision to reject their request. Also, if the law does change, there still won’t be an actual right to work flexibly, only tweaks to the right to put in a request. You’ll still be able to turn down requests, or offer a modified arrangement, if one of the business reasons set out in the current legislation applies.
Despite this, you might want to:
- Track how long it’s currently taking the business to respond to requests (including holding any appeal). If you’d struggle to complete the procedure within 2 months, it could be worth starting to think about where you can save time if necessary.
- Think about what impact having to respond to up to 2 requests a year per employee would have and whether managers would have the time to deal with this.
- Train managers in how to handle requests if there are complaints from staff about a failure to consult them or a high level of resignations after requests have been rejected.
- Consider offering the opportunity to work flexibly in your job adverts whenever the role allows. Even if employees don’t gain a Day 1 right to request flexible working, this is a good way to attract candidates and broaden your talent pool, especially if you can’t match individuals’ salary expectations amid the current cost-of-living crisis.
| PAYROLL
Sarah Bradford, Editor-in-Chief, Pay & Benefits Adviser |
Relaxation of Rules Regarding Reporting of Salary Advances
The Real Time Information (RTI) legislation imposes strict deadlines on the reporting of payments and penalties are charged where these are missed. However, HMRC have recently announced a relaxation of the strict rules in relation to the reporting of salary advances.
Reporting Deadlines
Under the RTI legislation, employers are required to report payment of earnings to HMRC electronically via the submission of a Full Payment Submission (FPS) at or before the time that the payment is made to the employee. Where a payment is reported late for more than one tax month in the tax year, a late reporting penalty is charged. This means that if more than one payment is made to an employee in a tax month, a FPS should be submitted for each payment, rather than sending a single FPS covering all the payments made in the month.
Salary Advances
A salary advance is where an employee is paid some of their salary before their actual payday. This may be under arrangement between the employer and the employee or via an arrangement with a third party who will normally charge a fee for providing the service.
Under the strict statutory position, an advance of salary is treated as a payment on account of earnings. Consequently, the employer must submit a separate FPS to report this payment to HMRC.
It is important to note here that a payment on account of earnings is not the same as a loan. Under RTI, loans made to employees do not need to be reported to HMRC on the FPS.
Under the legislation, a payment on account of earnings is treated as received when the payment is made. A payment is a payment on account of earnings when the employer has no right to recover the payment. This can be contrasted with a loan which, by its very nature, is repayable.
For example, if an employee is paid a salary on the last day of the month in arrears, they will have earned half of that salary halfway through the month. However, they will not be due to receive the payment until the last day of the month. If the employer agrees to a salary advance in the middle of the month, this is a payment on account of earnings.
Relaxation
HMRC recognise that the statutory position creates extra work for both employers and HMRC. The employer must submit an additional FPS and HMRC must process it.
The submission of an additional FPS may also impact on the dynamic coding process, resulting in the issue of an incorrect PAYE code. Where the employee receives universal credit, the reporting of a salary advance may also affect the amount of universal credit that the employee receives.
To alleviate these problems, HMRC are to amend the secondary legislation to change the statutory position so that salary advances can be reported on or before the employee’s contractual pay date, rather than on or before the date on which the employee receives the salary advance. This means that the employer will only need to send a single FPS to report the salary.
Employers who currently report salary advances on or before the contractual pay date (rather than on or before the date on which the salary advance is paid) can continue to do so.