As an employer employment law is something which you must give due consideration to. If you fail to comply with this area of the law when hiring employees, it could result in costly and time-consuming lawsuits, and could damage your business' reputation. In this article, we discuss the law surrounding payment and salary requirements.
Broadly speaking, employers are free to pay an employee a wage which they believe corresponds with their role in the company. However, the law states that employers have to pay at least the NMW (National Minimum Wage). The same NMW is applicable for almost all employees, but those under a certain age, or those who are working as apprentices, may be paid a slightly lower amount. In addition to this, employers are required to honour their entitlements of their employees to things like adoption, paternity or maternity pay, and statutory sick pay.
Employer employment law also states that you can only make a deduction from a employee's wage when you are legally obliged to (i.e. to make National Insurance and PAYE tax contributions) or when you have agreed to do so in advance (for instance, if a deduction agreement is included in their employment contract). Employers have to provide all of their employees with payslips as well.
In addition to ensuring that your employees are paid a fair wage for the work they do, and that they receive all of the benefits they are entitled to, you may also have to address the issue of employee share schemes. These schemes are designed to align the shareholder and employees' interests, by providing employees with the opportunity to take a direct interest in the company's financial performance.
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