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3 Factors you need to know about Executive Pay Gap report!

Firstly, what is the Executive Pay Gap report? This means the UK’s biggest listed companies must now justify the gap between senior executives and their staff. In other words, businesses will have to justify the difference between senior executive salaries and average annual pay for employees. This is different to the Gender Pay Gap reporting because Executive Pay reports on seniority and not gender. This forms part of the government’s plan to improve transparency around senior executives’ remuneration. MPs also hit out at companies for failing to pay the living wage to its lowest-paid workers. Secondly, will this affect you as well as your business? The below 3 points will give you clarity.

What will the Executive Pay Gap report on?

As mentioned above, this report will divulge how much Senior Executives from UK’s biggest listed companies earn compared to their employees. This will not only include their remuneration but also bonus payments as well as share-based incentives.

Will this affect every Senior executive?

No. According to GOV.UK, this report is only applicable to Senior executives in companies that have more than 250 employees within the UK.

When will this be implemented?

The Executive Pay Gap reporting was implemented in January 2019 however, figures will only be released in 2020. Remuneration of executives will be under the microscope.

In Conclusion

In conclusion, 360 Law Group say that the concept of reporting on executive pay may seem somewhat straightforward.  However, in practice, employers could encounter several problems along the way. Firstly, the nature of executive pay differs greatly to that of the average employee. With the legal obligation to include bonus payments as well as share-based incentives, the calculation could become complicated. What’s more, companies will also be required by the new regulations to report on full-time-equivalent pay for the UK workforce. In other words, employers who outsource certain functions or take independent contractors may have inaccurate results between the highest and lowest paid employees.


Can an employee get time off work for public duties?

As a Payroll Bureau, we are often asked for advice and guidance surrounding time off work for public duties, specifically Jury Service. However, it is important to remember that there are other forms of public duties that also require time off work; Jury Service is one most of us come across when processing payroll. The following guidance is courtesy of HMRC.

So, can an employee get time off work for public duties?

The answer is YES. You can get reasonable time off work for public duties. However, employees should note that employers have the right to choose whether to pay workers for time off, as they are not obliged to.

For example, with regards to Jury Service, all workers are entitled to time off. Keep in mind the following:

  • Employers must allow an employee time off for jury service, although employees can ask for a delay if it will harm the business but can only delay once in a 12-month period.
  • In most cases, Jury service takes an average of ten working days but may be longer or shorter depending on the case.
  • There is no legal obligation for an employer to pay an employee while on jury service as the court will pay certain costs.

What occupations are considered as public duties?

There are several occupations where an employee may require time off in order to fulfil duties. For example, other occupation could include, school governor duties, member of a statutory tribunal, trade union member (for union duties), health authority member.

Employees in the reserve forces, for instance, Army Reserves, have certain protected rights under employment law if they are called up to serve. Employers of reservists also have rights and obligations. For example, they may be able to claim financial assistance or an exemption.

Reasonable time off

The amount of time off should be agreed between the employee and employer beforehand, based on:

  • how long the duties might take
  • the amount of time the employee has already had off for public duties
  • how the time off will affect the business

The employer can refuse a request for time off if they think it’s unreasonable. They can’t refuse their staff time off to do jury service.

What occupations do not qualify?

Police services and armed forces, merchant seaman, civil servants (in certain circumstances) and agency workers. Click here to view a full list of occupations on the HMRC website.

Disputes regarding being allowed to take time off  

Disputes do occur so there are ways in which an employee can raise a grievance if they think the employer is unreasonable in the time they allow.

In Conclusion

In conclusion, employees can get time off work if they have negotiated terms with their employer. During the employer negotiations, pay must be discussed, length of public duties, previous time off for public duties as well as how the business will be affected. Make sure you know what duties are considered a public duty so that you can request reasonable time off work.


2019 Statutory Pay Increases

Statutory Pay Increases | National Living Wage | UK GDP

Chancellor Phillip Hammond announced during his October budget speech that the National Living Wage will increase from 1st April 2019. Similarly, the government also accepted all other national living wage increases suggested by the Low Pay Commission or LPC. This means that full time workers will enjoy an additional £690 per annum.

Let’s have a look at the breakdown!

YearAge 25+21 – 2418 – 20Under 18Apprentice
2018 – 19£7.83£7.38£5.90£4.20£3.70
2019 – 20£8.21£7.70£6.15£4.35£3.90

Click here for more information.

Other Statutory Pay Increases

In addition, statutory maternity, paternity, adoption and shared parental pay as well as maternity allowance will increase to £148.68 a week from 7 April 2019. This was previously £145.18 a week.

Statutory sick pay will also increase on the 6th of April 2019 from £92.05 per week to £94.25 per week.

What is the Low Pay Commission saying?

The chairman of the LPC, Bryan Sanderson, said “The increase in the national living wage to £8.21 per hour in April 2019 will ensure a pay rise for the lowest-paid workers that exceeds both inflation and average earnings.”

The labour market has performed well and the economy has sustained economic growth. As a result of a sustained economic growth, the government is aiming for the national living wage to reach 60% of median earnings by 2020.

According to Personnel Today, the Low Pay Commission has currently estimated the National Living Wage will reach £8.62 per hour in April 2020.

In conclusion

In conclusion, there are a few benefits to the National Living wage increasing. Firstly, this should lift workers out of the poverty zone. Secondly, workers should have more disposable income that they can spend on goods and services. As a result, the gross domestic product or GDP of the country will increase due to high consumer confidence. Thirdly, the Gender Pay Gap should reduce as income can be more evenly distributed. Finally, as the spending power of consumers rises so will the demand for labour. Therefore, more jobs will become available and unemployment rate will decrease.  


How to improve your Gender Pay Gap Statistic?

Gender Pay Gap reporting is relatively new; therefore, most businesses are struggling to improve their data. In order to improve this data, you first need to understand the definition of Gender Pay Gap, how this differs from Equal Pay and what it measures. 

The gender pay gap is the difference between the gross hourly earnings for all men and the gross hourly earnings for all women. This often gets confused with equal pay. According to Mercer, the gender pay gap is the difference between what men typically earn in an organisation compared to what women earn, irrespective of their role or seniority. Most importantly, equal pay is the legal requirement for men and women to be paid the same for performing the same work that has been rated of equal value.

What is the Gender Pay Gap data telling us?

Although the Office of National Statistics have reported a Gender Pay Gap decrease from the previous year, the larger businesses are not performing well according to the BBC. In addition, the BBC previously reported on how the millennials are leading the charge with regards to bridging the Gender Pay Gap. See the below graph.

BBC Equality GPG graph
BBC Equality GPG graph

It is evident from the statistic above that the GPG will steadily decrease over time as the millennials climb the corporate ladder. In our opinion, businesses are trying to force the data to improve and not allowing time to run its course. Moreover, larger firms will struggle to improve their GPG reports as they employ more people. However, larger businesses can create and implement a long-term strategy on improving their numbers. 

There is one complication however, and that is part time workers. Part time work is mostly dominated by women as indicated in figure 1 of this article by the Office for National Statistics. Naturally, part time workers are often paid less than full time employees, due to a pro-rata salary, which will negatively affect your Gender Pay Gap report. Therefore, allowing employees to work from home but be employed full time rather than on a part time basis is a more logical solution. Not only will this increase your GPG report, but it will also promote a healthy work life balance. Alternatively, you could increase the pay of your part time employees however this would then create an imbalance when comparing full-time equivalent salaries.

In conclusion

In conclusion, you will need to create a Gender Pay Gap action plan in order to improve your data. Above all, businesses need to focus on employing more women at the same salary rate as males for the same role. In addition, businesses need to be more flexible and should consider allowing employees to work from home on a full time basis rather than part time. Contact us for more information.


MP Payroll Solutions is now CIPP (PAS) Accredited

We are excited to announce that MP Payroll Solutions has achieved the CIPP PAS accreditation. Above all, this is the CIPP’s flagship payroll audit solution. In addition, it offers peace of mind to all who work with the industry or are seeking payroll services.

This consists of two distinct elements. Firstly, the CIPP audits the payroll process. Secondly, the CIPP audits the learning and development of our staff within the payroll function.

The CIPP Payroll Assurance Scheme is the only voluntary accreditation on the market. In addition, it offers bureau confidence in our payroll services from an audit which was approved and developed in partnership with HMRC.

What does it mean if a supplier has PAS?

The CIPP has audited and found MP Payroll Solutions to be proficient in the following:

  • They have suitable processes in place for preparing and delivering legislative changes
  • Necessary areas for development and improvement are highlighted and therefore have been actioned
  • The business is dedicated to compliance and best practice in payroll
  • Better engagement and retention of staff due to better management of the payroll function
  • The business is dedicated to life-long learning and development
  • The business shows openness and therefore mitigated the risk of compliance failures by opting to engage in PAS

What are the business benefits of the Payroll Assurance Scheme?

  • Improvements in the process have led to greater effectiveness and efficiencies within the payroll function which leads to overall time and cost savings
  • As a customer seeking payroll services, the CIPP PAS offers you clear evidence that compliance is key to a provider, therefore making your decision an easier choice
  • For an employer, this shows your existing and potential customers that you care about best practice and, therefore, understand how important it is to have all the key points of a healthy payroll function
  • Demonstrate to employees, customers and suppliers that your business supports payroll best practice by using the CIPP PAS accreditation logo on your company communications
  • Increased staff motivation and improvements in productivity. It demonstrates the business’s investment in the staff’s learning and skills development as well as the willingness to continuously review process for the better
  • Improved service levels to colleagues or customers

In conclusion, the CIPP Payroll Assurance Scheme accreditation confirms that MP Payroll Solutions is an esteemed payroll bureau. In addition, this confirms we have all the necessary knowledge and foundation to run your payroll in a completely compliant way.

Follow this link for more information on the CIPP Payroll Assurance Scheme accreditation.

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About MP Payroll Solutions

We are a specialized BACS Approved Payroll Bureau with 15 years’ experience of processing payroll for clients in a variety of business sectors.

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