With the end of the current tax year approaching, many employers will likely start looking at conducting pay reviews and awarding bonuses shortly. With the cost-of-living issues that are currently well publicised, employers may wish to also consider implementing further measures to assist their staff during this difficult time.
While there is no obligation to do anything on the part of an employer, it is widely recognised that difficulties faced outside of work are likely to impact on workers’ productivity and quality of work. It is therefore worth employers seriously considering what can be done to support their staff, and particularly those on low earnings.
Pay and Bonuses
Of course, the obvious way to assist employees would be to provide financial support. That can take many forms, however, such as the following:
- Higher than usual percentage increases could be considered, either across the board or if that isn’t feasible, purely for those on lower wages.
- More frequent pay rises could be used to increase wages gradually through the year, rather than waiting until the end of the financial year.
- Pay rise dates could be brought forward to assist those in immediate need.
- One-off lump sum payments, sometimes called cost of living bonuses could be used. Care should be taken, however, to ensure such payments do not impact any benefits received by low earners, with a solution being to potentially stagger these payments.
Financial Wellbeing Policy
Even if employers cannot afford to assist financially, those who demonstrate their commitment to supporting financial wellbeing can make a much-valued difference to their workforce.
Many employers are implementing financial wellbeing policies, signposting employees to support that can be offered and the benefits available. Understandably, some employers might not want to go that far, but the following key points could at least be something to think about:
- Let your workforce know that they can get free, confidential and independent money and debt advice from the government’s Money and Pensions Service.
- Make sure your workforce is fully aware of all the benefits you currently offer and how to make the most of them.
- Start to normalise conversations about money worries at work; showing concern and empathy can help to break down any stigma.
Allowing greater flexibility may allow employees to cut costs. The following could be options to consider where plausible:
- Location – are you able to allow employees to decide where they want to work, for example, from home or a different site?
- Travel – if employees do need to come into work, is it possible to allow them to do so outside of peak hours to keep costs down?
- Working hours – is it possible to condense working hours into a shorter working week, allowing fewer travel costs?
Reviewing Benefits Available
Certain benefits could be provided at relatively low costs to employers, but which in turn allow employees to cut their costs.
- Childcare vouchers can be provided as a tax-free salary sacrifice benefit, incurring no extra cost to an employer.
- Cycle to work salary sacrifice schemes can be used whereby bike payments can be taken out of salary before tax, thereby saving employees the cost of purchasing a bike.
- Discount cards or vouchers could be provided to assist with savings on shopping.
- Loans or subsidies could be provided, such as season ticket loans to enable a saving on train tickets, or to assist with the purchase or set-up of new technology.
Most employers include a provision in their contracts of employment to prohibit employees from working for other employers during employment. However, given the current cost of living, there is research to suggest that many are considering taking a second job.
Employers therefore may be prepared to relax such provisions. Of course, you would need to ensure that any relaxation is not likely to impact on performance and service to your business and therefore where such relaxation is considered, employers could consider imposing the following requirements:
- Require employees to inform you if they do take on a second job and the hours and nature of the work.
- Ensure that by taking the new role, it won’t place you at risk of breaching the Working Time Regulations. Either ensure the employee is working under 48 hours per week or obtain an opt out.
- Make clear that any second job should not impact on the primary role for you, should not be for a competitor, and should not risk damage to your reputation.
Please contact us for more information about the matters addressed above, or if you have any other employment law queries at 029 2034 5511 or firstname.lastname@example.org