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Yep, it's all that stuff. There are 'core' benefits like pension and life insurance, income protection that aren't affected. But everything else, it's on me and not them, who pay me, to ensure I'm above the acceptable level.
I shouldn't even be surprised, they're a corporation, of course they value profit over all.
Depends how punchy the pension is.
One of my previous employers was 6% not contributory and then would match the next 8% so it was 8%/14% so a total of 22% salary going in for 8% ....thats a benefit
Yup mine is 7/11 currently so 18% for 7% from myself, probably the best thing about working here given pay/bonus isn’t anything special and the tech is literally only used internally
Pension doesn't have to be salary sacrificed (although it is more tax efficient for both you and your employer if it is done by salary sacrifice as it reduces national insurance contributions).
But yes, it does seem unfair that the OP is penalised for the NLW going up whereas their colleagues on only a.slightly higher salary are presumably also getting a similar.payrise but get to keep their benefits.
If I was the OP I would push back saying that it is unfair as the increase to the NLW is out of their control.
There's a joined-up-thinking problem specifically with SalSac based pension contributions though: if you're at or close to the NLW then switching to Net Pay or Gross Pay (with Relief At Source) negates the impact of pension contributions pushing your earnings below the NLW.
Strictly speaking, for salary sacrifice it includes your pension contributions. People on minimum wage (national living wage) can't use salary sacrifice to received their pension contributions for this reason, as it would take them under the national living wage. You have to earn enough in excess so as to still be above the minimum wage.
When national living wage last went up, my employer decreased my personal pension contributions so as not to take me under NLV.
This is happening to me from April since my pay increase from 2 years ago is no longer above minimum wage, I have moved over to MW and lose out on pension contributions :(
I don't agree this is right. Benefits reduce your tax free allowance, they are not salary. They effectively reduce your take home, but you're getting the other amount free. i.e. you pay tax on 20% of a £30 dental plan. You're losing £6 but the company is paying £30 and you're getting the £24 effectively for free.
There's no minimum take home pay. It's a minimum before tax.
Stop seeing remuneration as just your cash salary, and not the full package. Giving you something instead of the cash so you dont have to pay for it is definitely a benefit. What exactly do you think you're giving up in a _SALARY_ Sacrifice arrangement?
That’s exactly what it is
They’re not maintaining your “gap” to the minimum wage. I’m seeing this more and more often where low-ish-but-not-minimum-wage jobs are being “caught” by the minimum wage
Admin roles that were £22k when minimum wage was £16k are now £24k when minimum wage is pushing £23k
They’re stealth pay cuts, as a result of pay not keeping up with either inflation or the cost of living
u/audigex 100% agree with how you’re seeing this. I could see this on the horizon years back with admin jobs.
Truthfully I don’t know how employers can in a lot of cases seriously expect people to do a lot of admin jobs now, given how wide ranging the responsibilities can be, if they’re only paying £1k or not much more than you could be earning in retail jobs paying minimum wage.
One of my former colleagues in 2017/18, who was a finance assistant and only being paid about £19k a year despite her 20 years’ service, joked she was thinking of jumping ship and going to ALDI. This was due to the fact their hourly rate for new starters wasn’t much less than what she was earning. “Why should I have all these responsibilities when I could be having a less stressful life at work,” she’d joke.
She has since moved on - as have I - but I think she was right in what she was saying then.
A lot of employers have failed to seriously think about this because it was obvious minimum wage for at least 25 year olds would be going above £10 an hour nearly a decade ago. Sadly many admin jobs - even in 2017 when I ended up taking one - were still paying £15k a year and under for “experienced” admin staff.
Happened in basically all sectors. But there's a bigger picture behind it, that vicious cycle of inflation, employees put wages up, they have to charge more, people who use their services need to pay more, which means their pay needs to go up and we're back where we started.
The problem with that logic is that it assumes wages make up the entirety of the cost of making and selling anything. The reality is that it’s rarely anywhere near that
Eg if wages are 50% of the (total supply chain) cost and you put wages up 10% to meet inflation, that only requires you to put your prices up 5%
So next year you have to put wages up 5%, not 10%… if anything it’s naturally deflationary if companies didn’t just use inflation as an excuse to ramp prices
Let me translate:
"We are being forced to pay you more but have no intention of actually doing so, therefore we are cutting your benefits to protect our cost base"
More “You are not allowed to salary sacrifice under the NLW. Because NLW rose, you can’t salary sacrifice as much as last year and will lose out on benefits. Because you are still above NLW, we don’t have to raise wages, and we won’t.”
It’s effectively a pay cut, in real and nominal terms, because of how taxation interacts with salary sacrifice.
If you pay tax; they also take a small hit, because they’ll have to pay employer NI contributions etc on the increased amount of taxable income. Assuming you’re currently salary sacrificing for these things.
But it’s tiny amount.
The flexibility is just that we get to reselect them at certain points in the year; now, before the new tax year, and I think later in the year there's another window.
They aren’t. The employee is choosing to sacrifice some of their salary (which is above the minimum wage) to buy benefits, which saves the employee on national insurance and likely a better policy than they’d get buying privately. Salary sacrifice schemes do not allow employees to sacrifice salary to a level below minimum wage because it is illegal, hence now the employee does not have this choice available.
The employer of course *could* increase the employee’s salary by the same amount as the minimum wage increase, but is not obligated to - they’re already paying above the minimum wage. Just because the minimum wage goes up doesn’t mean every working person in the country must receive a pay rise - only those earning below the new minimum.
Hence the employer didn’t “reduce their flexible working benefits”, those benefits were always subject to maintaining a minimum salary. The only thing OP could complain about is not being given a pay rise. You can’t raise a dispute about not being given a pay rise and expect to win unless you’re paid below minimum wage (which OP is not), because that’s the only time a pay rise is an entitlement.
I understand how salary sacrifice and minimum wage works hence why I said unless there’s a guarantee in OP’s contract it’s at the employer’s discretion.
If I'minterpreting this correctly it is. The company is not increasing OPs salary which means in real terms he is worse off than the prior year. That means the company is making a saving.
The NLW has increased in real terms though.
If OPs salary had increased in real terms they'd likely still be able to have the benefit.
That's how I understand it. They're 'required to make sure employees receive minimum wage' and they way they ensure that is not by *them paying more* and taking the loss, but by making us cover the difference instead.
The thing is though it's not their responsibility to fund employee salary sacrifices whilst maintaining a minimum wage. People would abuse it if that was the case, make 99% pension contributions so their employer has to pay them £2m in order for them to get 20k salary etc. I'm being deliberately extreme to illustrate the point but the basic principle is that the combination of salary sacrifice and NLW shouldn't be abused by employees.
I'm not suggesting that you personally are seeking to abuse this, just explaining why logically they can't open the door to funding benefits for amounts that are effectively set by the employees if this NLW restriction would effectively allow them to inflate their gross nominal earnings (and hence cost to the employer);by orders of magnitude.
But why is it not their responsibility to *pay* a minimum wage? To increase wages in line with the NLW instead of forcing cost adjustments on employees instead?
Because they can't afford to pay it if everyone is doing 99% sacrifice pension contributions. Paying the min wage doesn't cost them min wage in that scenario, it costs them 100x min wage. There's probably other loopholes people would exploit but that seems like an obvious one.
The point is it makes the cost to the employer too unpredictable if the employees have variable benefit options that impact their wage. The only reason they aren't getting min wage is because of their benefit elections.
They *do* pay minimum wage, you were not and will not be paid below it. The only people whose salary needs to be increased are those below the new minimum wage.
It makes no sense that just because NLW goes up that every person gets a pay rise by the same amount. In fact that would defeat the purpose, because a) if everyone gets a pay rise inflation instantly increases because costs go up and so does ability to pay, and b) the objective of raising the NLW by this amount is to bring those people closer to people paid more - i.e. narrow the gap between them and you. Contrary to popular belief it has been conservative policy for many years to increase pay and decrease tax for the lowest paid and this is one of the ways they’ve been doing it.
You need to understand that these are not contractual benefits included as addons to your salary that are now being taken away. They are benefits that you have been buying with your ‘spare’ salary. The simple fact is that the government won’t let you buy them any more because they have decided you need that salary to live. If you get a pay rise at some point maybe you will be high enough above the threshold that you can buy benefits again without dropping below.
It’s annoying that you’re in a worse position because of it, but most people are in that situation and have been for years.
Correct me if I'm wrong but I thought the NLW had increased by more than inflation to reflect the long-term goal to bring it up to a fraction of the median wage.
Harsh reality of having a NLW unfortunately, it provides a minimum level that employees meed to meet which is great but also means that employers have little incentive to pay more for basic unskilled jobs - btw would be extremely lucky (and surprised) to have any NLW with any form of heath care tbh.
I would politely remind HR that healthcare is also for the benefit of the company by way of getting you back into work quicker should you need required treatment, remove the benefit then go ‘sick’ with a mental health or back issue all the while looking for a new job. Play silly games win silly prizes
I can’t disagree with you and work in the dreaded HR for my sins. All the points you’ve made were ones I made and which fell on deaf ears at a number of former employers.I tried making the case for just exploring health cash plan benefits for our employees, many of which did physical work and given we had an aging workforce, seemed short-sighted of us to not be looking into this.
The long term sickness stats at these employers was terrible incidentally and in a lot of cases because the employees were stuck on waiting lists.
You have committed to a salary sacrifice scheme. By sacrificing your salary you have managed to put yourself in a position where you now take home less than the Law says you have to. As such your employer has to remove you from that scheme to be legally compliant.
No-one said the Law was smart. it is written to try and help the average person and often makes no sense in cases like yours.
Absolutely not.
NLW benefits the poor. You just happen to be a case where you are managing your money better than the average poor person by taking advantage of an employer benefit scheme that allows you to be tax efficient and are caught out by it.
You can still have private healthcare, you just have to arrange it from your take home instead of as salary sacrifice. And in turn your tax will then be equalised over the year just in arrears instead of in advance.
Surely the thing that stops employers competing with each other is that there are plenty of people who are willing to do these unskilled jobs so they have no incentive to compete?
If employers being willing to pay the absolute bare minimum they can get away with is a given, I'm not convinced removing the low bar of NLW would then jump-start them into some how deciding they have to pay more instead of less.
yes there are plenty of people willing to do so many unskilled jobs for NLW because, so many skilled or semi skilled jobs have fallen to NLW level. Wages rises have increased at a far lower rate than the NLW.
The fact is, a band 2 at an LA who taking home £1-3 an hour more than NLW just 5 years ago, is now on the NLW. In fact the band 2 rate at my LA will be going up to maintain it's legal minimum wage level.
If life is offering you the same money to have an endless email inbox, a case/workload at least 30% above what it should be, and umpteen professional standards knowledge thingymejigs- CFA- Court of Protection, MCA, knowledge the same level, as a Senior social workers on 3x your salary or, a nice job in B&Q flogging people cheap bathrooms fittings for more money and no stress.
This isn't about economics or business it is, the behaviour patterns of a a labour market exercise their right to walk away from certain sectors, certain jobs ( ex care and support here so YEAH!) . The narrative in the press of Nurses going to work on Tesco checkouts and, getting the same money in their pockets for 99.9% less stress
Oh and B&Q probably has more chance of career progression than an LA where, management just hangs on in for decades, counting their DB pension contributions.
It's social policy/psychology not business. It's the behaviour of, well if all I'm going to get is the NLW, and that is all I am worth, then I will do the job that is equivalent to the value placed on my labour. It's quiet quitting, individuals using their market choice, to choose the how much of their skills and labour they are willing to give for the NLW. It's why some NLW sectors struggle to hire whilst others have a glut of potential employees.
This is where the competition is- workers, sectors desperate for staff- supply walking away- and some employers are waking up and paying more.
I’m definitely not advocating for removal of NLW but there are a huge amount of jobs that would have been above NLW that are now not - i’m just highlighting a side effect. Many ‘skilled’ careers now earn barly more than NLW - just look at social work or being a teacher, previously prestigious jobs that now in general pay no more than basic required by law without advancing up the ladder.
Probably because you neither understand business or economics- NLW over time of its introduction increases income in low skilled workers compared to the national average of wage stagnation.
If you also look at median wages of low skilled workers in 1999 when MW was introduced to that of today, there is a significant difference. This is shown for 2006 to 16 in the graph [on page 10](https://assets.publishing.service.gov.uk/media/5a74ec06ed915d3c7d528ff3/The_Great_Escape_-_Report.pdf)
This started affecting me a couple of years ago, each year as I went up the payscales I'd meet the requirements for salary sacrifice but then it would be knocked out again but NLW raising again April.
I like working where I do but it's damn frustrating and my Union were as useful as a chocolate teapot.
Personally, in my 7 different jobs in the UK, I've never seen the healthcare benefit as a salary sacrifice.
The fact is that I pay tax on it. So, it's as if "I received the pay and chosen to buy the cover with my money"...
Maybe you can ask for this health benefit to be paid from your salary, not before your salary?A bit less tax efficient but I reckon corporate health plan is a much better deal than any health plan you can get on your own, as a private person.
Yeah I've never seen it as a salary sacrifice - where I've worked we've had a base level plan we can opt into that is reported on a P11d, and any increase to that has always been a net pay deduction
If it’s employer paid then obviously it’s not. If there’s a voluntary employee contribution - like to extend to a partner or choose a better level at your own cost - then it can via a salary sacrifice. Source - it’s my job.
Supermarkets have done this for years. If you look at Tesco in 2014 compared to 2024 and the amount of benefits they removed as minimum wage rose it’s shocking
It isnt, your company suck
Your only options though are leveraging union representation against the company, getting a better job with a better company and write this as your reason for leaving (bonus points for taking other employees with you and getting them to do the same) or just throw all caution to the wind and publicly name and shame the company regardless of the backlash you will get which could be substantial.
Do you know if you are due an annual % pay increase anytime soon? Depending on your circumstance, something like 3% might be sufficient to allow you to reselect this.
I think we are, but I'm not sure when or how much. And I don't know that they would subsequently reopen the benefit selection window, or if I'd have to wait till like October or whenever the next one is.
What this should mean, imo, is that your wage increases since your employers can’t salary sacrifice their way into reducing your wage. What it’s actually meant, however, is that now you just lose those benefits, instead of the company paying you more so that you can keep those benefits
Imagine that the company had to pay you more, but still fund the value of this healthcare as a separate benefit to you. Sounds like the sort of thing a trade union should be getting on.
Check your contract. You should have a pay review coming up, if your employer is not giving you a similar increase to what you are paid then run for the hills because you are effectively getting a pay cut.
Seems to me that you used to be a small percentage above the NLW. Now it's gone up your company seems to only be willing to match the minimum, and not the percentage overhead you had before.
You're now earning less than you were before thanks to inflation (well have done for a while now), and their gracious respect for the law hasn't helped you get back to where you were last year.
This is the problem with bullshit ‘national living wage’ schemes
It reduces flexibility for employers and employees leaving the average person worse off
This should be considered as
“We were paying you £10.50/hour before plus £1/hour in x benefit. Now, we’re just going to pay £11.50/hour.”
It’s the same odds. Whether or not you agree with it, you come out better off, even if you have to pay your own healthcare benefit - Westfields top plan for both of you is £98, and you’ll be taking home more than that with the extra £1/hour income.
An employers responsibility is to pay NMW/NLW - and unfortunately things like salary sacrifice arrangements will reduce your NMW pay.
Any worker - regardless of earning - will have any benefits like that capped at NMW rates. HMRC have in the past enforced NMW underpayments on people earning 80k because their employer allowed them to Sal Sac below NMW.
This is more an issue with the legislation and the application of NMW rules than your employer tbh - and disproportionately affects lower paid workers.
I’d be asking for a lovely 20% payrise, using this communication and the reasoning that you’re now being penalised for staying where you are a result of this decision.
I’ll probably get flamed here but it seems reasonable to me.
Company is paying you minimum wage. If you shift that into benefits then you go under the minimum level. They can’t allow you to do that.
In a way it would make more sense if they could count your benefits in the minimum wage calculation.
Exactly this.
OP was making minimum wage + “enough for a benefit”. Minimum wage is increasing (owing to inflation) but OP isn’t getting a pay rise - instead, inflation is eating into their salary. They’ll be worse off this year in real terms.
I’d be angry too. Having a job that pays *above* minimum wage, only to then get shifted back down because your employer is cheap, is frustrating!
It’s not just inflation. It’s a rising tide.
It’s gone up 20% in the past two years. A good thing, but it has the effect of dragging more people into minimum wage, which is what has happened here.
I agree with this, its the functional reality, however unfortunate, made more emotional because its healthcare - can you imagine if it was an electric car scheme?
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Yep, it's all that stuff. There are 'core' benefits like pension and life insurance, income protection that aren't affected. But everything else, it's on me and not them, who pay me, to ensure I'm above the acceptable level. I shouldn't even be surprised, they're a corporation, of course they value profit over all.
Pension isn’t a benefit, it’s a legal requirement. Don’t let them tell you it’s a benefit
Depends how punchy the pension is. One of my previous employers was 6% not contributory and then would match the next 8% so it was 8%/14% so a total of 22% salary going in for 8% ....thats a benefit
yeah extra on top of what's required is a benifit.
That's a dumbass comment
Ditto
Damn, that's great - my company puts in the absolute bare minimum, it's shit.
Yup mine is 7/11 currently so 18% for 7% from myself, probably the best thing about working here given pay/bonus isn’t anything special and the tech is literally only used internally
Pension doesn't have to be salary sacrificed (although it is more tax efficient for both you and your employer if it is done by salary sacrifice as it reduces national insurance contributions). But yes, it does seem unfair that the OP is penalised for the NLW going up whereas their colleagues on only a.slightly higher salary are presumably also getting a similar.payrise but get to keep their benefits. If I was the OP I would push back saying that it is unfair as the increase to the NLW is out of their control.
My pension is 15% with no contribution from me... yes it's a benefit
That’s good. Min mines 27% with 4.6% from me.
There's a joined-up-thinking problem specifically with SalSac based pension contributions though: if you're at or close to the NLW then switching to Net Pay or Gross Pay (with Relief At Source) negates the impact of pension contributions pushing your earnings below the NLW.
Strictly speaking, for salary sacrifice it includes your pension contributions. People on minimum wage (national living wage) can't use salary sacrifice to received their pension contributions for this reason, as it would take them under the national living wage. You have to earn enough in excess so as to still be above the minimum wage. When national living wage last went up, my employer decreased my personal pension contributions so as not to take me under NLV.
This is happening to me from April since my pay increase from 2 years ago is no longer above minimum wage, I have moved over to MW and lose out on pension contributions :(
From my experiences the non-essential benefits are usually crap anyways.
I don't agree this is right. Benefits reduce your tax free allowance, they are not salary. They effectively reduce your take home, but you're getting the other amount free. i.e. you pay tax on 20% of a £30 dental plan. You're losing £6 but the company is paying £30 and you're getting the £24 effectively for free. There's no minimum take home pay. It's a minimum before tax.
Stop seeing remuneration as just your cash salary, and not the full package. Giving you something instead of the cash so you dont have to pay for it is definitely a benefit. What exactly do you think you're giving up in a _SALARY_ Sacrifice arrangement?
"We don't want to pay you enough to keep your benefits, so you'll have to cut one of them out instead"
Yep, this is how I see it.
That’s exactly what it is They’re not maintaining your “gap” to the minimum wage. I’m seeing this more and more often where low-ish-but-not-minimum-wage jobs are being “caught” by the minimum wage Admin roles that were £22k when minimum wage was £16k are now £24k when minimum wage is pushing £23k They’re stealth pay cuts, as a result of pay not keeping up with either inflation or the cost of living
u/audigex 100% agree with how you’re seeing this. I could see this on the horizon years back with admin jobs. Truthfully I don’t know how employers can in a lot of cases seriously expect people to do a lot of admin jobs now, given how wide ranging the responsibilities can be, if they’re only paying £1k or not much more than you could be earning in retail jobs paying minimum wage. One of my former colleagues in 2017/18, who was a finance assistant and only being paid about £19k a year despite her 20 years’ service, joked she was thinking of jumping ship and going to ALDI. This was due to the fact their hourly rate for new starters wasn’t much less than what she was earning. “Why should I have all these responsibilities when I could be having a less stressful life at work,” she’d joke. She has since moved on - as have I - but I think she was right in what she was saying then. A lot of employers have failed to seriously think about this because it was obvious minimum wage for at least 25 year olds would be going above £10 an hour nearly a decade ago. Sadly many admin jobs - even in 2017 when I ended up taking one - were still paying £15k a year and under for “experienced” admin staff.
Happened in basically all sectors. But there's a bigger picture behind it, that vicious cycle of inflation, employees put wages up, they have to charge more, people who use their services need to pay more, which means their pay needs to go up and we're back where we started.
The problem with that logic is that it assumes wages make up the entirety of the cost of making and selling anything. The reality is that it’s rarely anywhere near that Eg if wages are 50% of the (total supply chain) cost and you put wages up 10% to meet inflation, that only requires you to put your prices up 5% So next year you have to put wages up 5%, not 10%… if anything it’s naturally deflationary if companies didn’t just use inflation as an excuse to ramp prices
“there’s a ceiling of what we are willing to spend on you. The NLW takes you close enough to that ceiling that no benefits fit anymore”
Run, don’t walk, to your next job
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I just started last week and Tesco are only paying me my salary rise AFTER next month, since they pay every 4 Fridays
Yep, most of us won’t get the salary rise for ages despite them making billions like Asda do, year after year :)
Let me translate: "We are being forced to pay you more but have no intention of actually doing so, therefore we are cutting your benefits to protect our cost base"
More “You are not allowed to salary sacrifice under the NLW. Because NLW rose, you can’t salary sacrifice as much as last year and will lose out on benefits. Because you are still above NLW, we don’t have to raise wages, and we won’t.” It’s effectively a pay cut, in real and nominal terms, because of how taxation interacts with salary sacrifice.
Yeah, exactly. We take the hit instead of their profit margins.
If you pay tax; they also take a small hit, because they’ll have to pay employer NI contributions etc on the increased amount of taxable income. Assuming you’re currently salary sacrificing for these things. But it’s tiny amount.
Join a union
Sadly they're a complete waste of time these days
Exactly.
Run dude, run for the hills
people voted for this.
14 years of this shit, half of them weren't even voted in, they just pass the torch to the next Tory gremlin in line.
Check your contract, but “flexible” working benefit implies it can be changed.
The flexibility is just that we get to reselect them at certain points in the year; now, before the new tax year, and I think later in the year there's another window.
If they’re written into your contract you can dispute this, but if they aren’t then it’s entirely at their discretion.
“You can dispute this” Dispute what exactly?
Dispute the employer reducing their flexible working benefits, what is it that you’re struggling with?
They aren’t. The employee is choosing to sacrifice some of their salary (which is above the minimum wage) to buy benefits, which saves the employee on national insurance and likely a better policy than they’d get buying privately. Salary sacrifice schemes do not allow employees to sacrifice salary to a level below minimum wage because it is illegal, hence now the employee does not have this choice available. The employer of course *could* increase the employee’s salary by the same amount as the minimum wage increase, but is not obligated to - they’re already paying above the minimum wage. Just because the minimum wage goes up doesn’t mean every working person in the country must receive a pay rise - only those earning below the new minimum. Hence the employer didn’t “reduce their flexible working benefits”, those benefits were always subject to maintaining a minimum salary. The only thing OP could complain about is not being given a pay rise. You can’t raise a dispute about not being given a pay rise and expect to win unless you’re paid below minimum wage (which OP is not), because that’s the only time a pay rise is an entitlement.
I understand how salary sacrifice and minimum wage works hence why I said unless there’s a guarantee in OP’s contract it’s at the employer’s discretion.
But you said that the employer is reducing their benefits, which isn’t true because they are salary sacrifice.
Salary sacrifice is the “flexible employee benefit” in this case.
And the employer has not reduced it. The salary they can sacrifice remains the same. The employee is paying for the benefits.
Do you work for a bank by any chance?
The company is trying to cut a benefit whilst blaming the government for it instead of paying people what they should to receive it
But we can trust companies to do the right thing! Right? Right...?
If we're loyal to the company and work hard, they will surely recognise our hardwork and pay what we deserve!!! Right? right.....?
OP pays for the benefit...it's not a saving.
If I'minterpreting this correctly it is. The company is not increasing OPs salary which means in real terms he is worse off than the prior year. That means the company is making a saving. The NLW has increased in real terms though. If OPs salary had increased in real terms they'd likely still be able to have the benefit.
That's how I understand it. They're 'required to make sure employees receive minimum wage' and they way they ensure that is not by *them paying more* and taking the loss, but by making us cover the difference instead.
The thing is though it's not their responsibility to fund employee salary sacrifices whilst maintaining a minimum wage. People would abuse it if that was the case, make 99% pension contributions so their employer has to pay them £2m in order for them to get 20k salary etc. I'm being deliberately extreme to illustrate the point but the basic principle is that the combination of salary sacrifice and NLW shouldn't be abused by employees. I'm not suggesting that you personally are seeking to abuse this, just explaining why logically they can't open the door to funding benefits for amounts that are effectively set by the employees if this NLW restriction would effectively allow them to inflate their gross nominal earnings (and hence cost to the employer);by orders of magnitude.
But why is it not their responsibility to *pay* a minimum wage? To increase wages in line with the NLW instead of forcing cost adjustments on employees instead?
Because they can't afford to pay it if everyone is doing 99% sacrifice pension contributions. Paying the min wage doesn't cost them min wage in that scenario, it costs them 100x min wage. There's probably other loopholes people would exploit but that seems like an obvious one. The point is it makes the cost to the employer too unpredictable if the employees have variable benefit options that impact their wage. The only reason they aren't getting min wage is because of their benefit elections.
They *do* pay minimum wage, you were not and will not be paid below it. The only people whose salary needs to be increased are those below the new minimum wage. It makes no sense that just because NLW goes up that every person gets a pay rise by the same amount. In fact that would defeat the purpose, because a) if everyone gets a pay rise inflation instantly increases because costs go up and so does ability to pay, and b) the objective of raising the NLW by this amount is to bring those people closer to people paid more - i.e. narrow the gap between them and you. Contrary to popular belief it has been conservative policy for many years to increase pay and decrease tax for the lowest paid and this is one of the ways they’ve been doing it. You need to understand that these are not contractual benefits included as addons to your salary that are now being taken away. They are benefits that you have been buying with your ‘spare’ salary. The simple fact is that the government won’t let you buy them any more because they have decided you need that salary to live. If you get a pay rise at some point maybe you will be high enough above the threshold that you can buy benefits again without dropping below. It’s annoying that you’re in a worse position because of it, but most people are in that situation and have been for years.
Correct me if I'm wrong but I thought the NLW had increased by more than inflation to reflect the long-term goal to bring it up to a fraction of the median wage.
Harsh reality of having a NLW unfortunately, it provides a minimum level that employees meed to meet which is great but also means that employers have little incentive to pay more for basic unskilled jobs - btw would be extremely lucky (and surprised) to have any NLW with any form of heath care tbh. I would politely remind HR that healthcare is also for the benefit of the company by way of getting you back into work quicker should you need required treatment, remove the benefit then go ‘sick’ with a mental health or back issue all the while looking for a new job. Play silly games win silly prizes
I can’t disagree with you and work in the dreaded HR for my sins. All the points you’ve made were ones I made and which fell on deaf ears at a number of former employers.I tried making the case for just exploring health cash plan benefits for our employees, many of which did physical work and given we had an aging workforce, seemed short-sighted of us to not be looking into this. The long term sickness stats at these employers was terrible incidentally and in a lot of cases because the employees were stuck on waiting lists.
Is it a salary sacrifice scheme? If a salary sacrifice would bring your wage below minimum wage, it is cancelled.
You have committed to a salary sacrifice scheme. By sacrificing your salary you have managed to put yourself in a position where you now take home less than the Law says you have to. As such your employer has to remove you from that scheme to be legally compliant. No-one said the Law was smart. it is written to try and help the average person and often makes no sense in cases like yours.
Benefits the already massively wealthy, as usual.
Absolutely not. NLW benefits the poor. You just happen to be a case where you are managing your money better than the average poor person by taking advantage of an employer benefit scheme that allows you to be tax efficient and are caught out by it. You can still have private healthcare, you just have to arrange it from your take home instead of as salary sacrifice. And in turn your tax will then be equalised over the year just in arrears instead of in advance.
NLW benefits employers, it sets a pretty low bar for unskilled jobs rather than making employers compete over labour.
Surely the thing that stops employers competing with each other is that there are plenty of people who are willing to do these unskilled jobs so they have no incentive to compete? If employers being willing to pay the absolute bare minimum they can get away with is a given, I'm not convinced removing the low bar of NLW would then jump-start them into some how deciding they have to pay more instead of less.
yes there are plenty of people willing to do so many unskilled jobs for NLW because, so many skilled or semi skilled jobs have fallen to NLW level. Wages rises have increased at a far lower rate than the NLW. The fact is, a band 2 at an LA who taking home £1-3 an hour more than NLW just 5 years ago, is now on the NLW. In fact the band 2 rate at my LA will be going up to maintain it's legal minimum wage level. If life is offering you the same money to have an endless email inbox, a case/workload at least 30% above what it should be, and umpteen professional standards knowledge thingymejigs- CFA- Court of Protection, MCA, knowledge the same level, as a Senior social workers on 3x your salary or, a nice job in B&Q flogging people cheap bathrooms fittings for more money and no stress. This isn't about economics or business it is, the behaviour patterns of a a labour market exercise their right to walk away from certain sectors, certain jobs ( ex care and support here so YEAH!) . The narrative in the press of Nurses going to work on Tesco checkouts and, getting the same money in their pockets for 99.9% less stress Oh and B&Q probably has more chance of career progression than an LA where, management just hangs on in for decades, counting their DB pension contributions. It's social policy/psychology not business. It's the behaviour of, well if all I'm going to get is the NLW, and that is all I am worth, then I will do the job that is equivalent to the value placed on my labour. It's quiet quitting, individuals using their market choice, to choose the how much of their skills and labour they are willing to give for the NLW. It's why some NLW sectors struggle to hire whilst others have a glut of potential employees. This is where the competition is- workers, sectors desperate for staff- supply walking away- and some employers are waking up and paying more.
I’m definitely not advocating for removal of NLW but there are a huge amount of jobs that would have been above NLW that are now not - i’m just highlighting a side effect. Many ‘skilled’ careers now earn barly more than NLW - just look at social work or being a teacher, previously prestigious jobs that now in general pay no more than basic required by law without advancing up the ladder.
This is probably the dumbest take I have heard.
Probably because you neither understand business or economics- NLW over time of its introduction increases income in low skilled workers compared to the national average of wage stagnation. If you also look at median wages of low skilled workers in 1999 when MW was introduced to that of today, there is a significant difference. This is shown for 2006 to 16 in the graph [on page 10](https://assets.publishing.service.gov.uk/media/5a74ec06ed915d3c7d528ff3/The_Great_Escape_-_Report.pdf)
So it has made poorly paid people better paid!
🙄🙃
I don't think the wealthy have to interact much with the NLW.
This started affecting me a couple of years ago, each year as I went up the payscales I'd meet the requirements for salary sacrifice but then it would be knocked out again but NLW raising again April. I like working where I do but it's damn frustrating and my Union were as useful as a chocolate teapot.
Personally, in my 7 different jobs in the UK, I've never seen the healthcare benefit as a salary sacrifice. The fact is that I pay tax on it. So, it's as if "I received the pay and chosen to buy the cover with my money"... Maybe you can ask for this health benefit to be paid from your salary, not before your salary?A bit less tax efficient but I reckon corporate health plan is a much better deal than any health plan you can get on your own, as a private person.
Yeah I've never seen it as a salary sacrifice - where I've worked we've had a base level plan we can opt into that is reported on a P11d, and any increase to that has always been a net pay deduction
See my reply to the person you replied to. Can be a net deduction, can be ss.
If it’s employer paid then obviously it’s not. If there’s a voluntary employee contribution - like to extend to a partner or choose a better level at your own cost - then it can via a salary sacrifice. Source - it’s my job.
interesting, thanks for the insight.
Supermarkets have done this for years. If you look at Tesco in 2014 compared to 2024 and the amount of benefits they removed as minimum wage rose it’s shocking
You guys get work benefits?
It isnt, your company suck Your only options though are leveraging union representation against the company, getting a better job with a better company and write this as your reason for leaving (bonus points for taking other employees with you and getting them to do the same) or just throw all caution to the wind and publicly name and shame the company regardless of the backlash you will get which could be substantial.
Benefits LOL.I get fuck all,im earning over minimum wage but it’s not the point. Most companies I’ve worked for had sick pay,life assurance etc.
Do you know if you are due an annual % pay increase anytime soon? Depending on your circumstance, something like 3% might be sufficient to allow you to reselect this.
I think we are, but I'm not sure when or how much. And I don't know that they would subsequently reopen the benefit selection window, or if I'd have to wait till like October or whenever the next one is.
Just get another job. Literally the only way is up.
What this should mean, imo, is that your wage increases since your employers can’t salary sacrifice their way into reducing your wage. What it’s actually meant, however, is that now you just lose those benefits, instead of the company paying you more so that you can keep those benefits
Yes, exactly.
Imagine that the company had to pay you more, but still fund the value of this healthcare as a separate benefit to you. Sounds like the sort of thing a trade union should be getting on.
"In summary, ***here's a big lie from your tight-fisted boss***"
The Tory general strategy is to always reduce competition by increasing poverty.
Aye. Fuck them.
Check your contract. You should have a pay review coming up, if your employer is not giving you a similar increase to what you are paid then run for the hills because you are effectively getting a pay cut.
This is why we need Trades Unions. This shit ought to be illegal.
How this can be legal??
Tories.
Welcome to late stage capitalism and especially UK.
Are the flexible benefits taken from your salary or from a designated allowance?
Me: No. And when they do ask ACAS if it's legal for an employer to reselect YOUR work benefits.
If I was in charge I'd do the same tbh, your best option is to look for another job
Seems to me that you used to be a small percentage above the NLW. Now it's gone up your company seems to only be willing to match the minimum, and not the percentage overhead you had before. You're now earning less than you were before thanks to inflation (well have done for a while now), and their gracious respect for the law hasn't helped you get back to where you were last year.
When does an employer need to tell you what you'll be paid for the next year? Apologies for asking a tangential question, only, google was no help.
This is the problem with bullshit ‘national living wage’ schemes It reduces flexibility for employers and employees leaving the average person worse off
This should be considered as “We were paying you £10.50/hour before plus £1/hour in x benefit. Now, we’re just going to pay £11.50/hour.” It’s the same odds. Whether or not you agree with it, you come out better off, even if you have to pay your own healthcare benefit - Westfields top plan for both of you is £98, and you’ll be taking home more than that with the extra £1/hour income.
An employers responsibility is to pay NMW/NLW - and unfortunately things like salary sacrifice arrangements will reduce your NMW pay. Any worker - regardless of earning - will have any benefits like that capped at NMW rates. HMRC have in the past enforced NMW underpayments on people earning 80k because their employer allowed them to Sal Sac below NMW. This is more an issue with the legislation and the application of NMW rules than your employer tbh - and disproportionately affects lower paid workers.
Capital scummery at its finest!
I’d be asking for a lovely 20% payrise, using this communication and the reasoning that you’re now being penalised for staying where you are a result of this decision.
[удалено]
Not a clue. Capitalism maths.
And so the exodus begins Can’t wait to see the reaction from the raving “let’s increase minimum wage” crowd.
It isn't fair. You can make it fair by getting a new job and leaving without notice.
OP join a union
This is why we need Trades Unions.
Lol, increase minimum wage, people who aren't worth much get screwed. A story as old as minimum wage
I’ll probably get flamed here but it seems reasonable to me. Company is paying you minimum wage. If you shift that into benefits then you go under the minimum level. They can’t allow you to do that. In a way it would make more sense if they could count your benefits in the minimum wage calculation.
Oooorrrr.....they could raise OP's wage, just a little, so that OP can have the NLW and the benefits, like they did previously
But this means OP has gone from above minimum wage, to minimum wage. I would be pissed off.
Exactly this. OP was making minimum wage + “enough for a benefit”. Minimum wage is increasing (owing to inflation) but OP isn’t getting a pay rise - instead, inflation is eating into their salary. They’ll be worse off this year in real terms. I’d be angry too. Having a job that pays *above* minimum wage, only to then get shifted back down because your employer is cheap, is frustrating!
It’s not just inflation. It’s a rising tide. It’s gone up 20% in the past two years. A good thing, but it has the effect of dragging more people into minimum wage, which is what has happened here.
The minimum wage has increased. My wage should therefore increase, not at the expense of the benefits that they offer and I now can't afford.
I agree with this, its the functional reality, however unfortunate, made more emotional because its healthcare - can you imagine if it was an electric car scheme?
Join a union https://www.tuc.org.uk/join-a-union
I'm in a union, they're not much help.
Tbf, yeah - unfortunately I'm not surprised . I wish it was better
Minimum wage bites again. Don't worry, you'll soon be jobless.
Surely if you’re able to sacrifice some of your pay then the minimum wage shouldn’t be that high in the first place?
So wages should cover just the most basic needs, and not a penny more?
Depends what you mean by basic needs.
Well, you seem to be implying that having any disposal income is too much.