Shared Parental Leave – the Story so Far

One year after the introduction of shared parental leave for parents of babies born on or after 1 April 2014, surveys on take-up were undertaken. Reports in the press declared it to be very poor, but it seems they got the wrong end of the stick.

What the Surveys Said

My Family Care and the Women’s Business Council questioned HR directors from 200 companies and found that around 1% of men had requested and been granted shared parental leave. But this was a percentage of all men employed, and only 10% of both the men and women employed had had a baby since April 2015. In fact, 24% of these women and 30% of the men who were new parents had taken shared parental leave.

In another survey by Totaljobs, out of 628 respondents, 86 became parents in the qualifying time. Among these, 21% were ineligible to take shared parental leave, while 31% took it. In both cases, this was considerably more than was reported in the press.

Are the Surveys Representative?

However, Mark Crail, content director at XpertHR, said the research should be taken with a pinch of salt. Not only were the samples particularly small, there were other factors to be taken into consideration.

“If the 30% figures are correct then take-up has been higher than expected – it’s good news, not the shock-horror story that much of the media has been running about these research findings,” he said. “The problem is many employers simply will not know whether or not men are eligible for shared parental leave unless and until they apply. If someone’s partner has a baby and they choose not to tell their employer, they won’t show up in the records. That makes it extremely difficult to get a good overview of what’s really happening.”

Why Parents Don’t Apply

There are clearly still barriers to taking shared parental leave. Many people just can’t afford it, especially if their employers are unwilling or unable to top up the statutory pay awarded. Among men, the culture of their organisation may discourage it, and both men and women are sometimes fearful that their careers would suffer. Some women and men said that they believed that women prefer to be the main carer of their children. A lack of awareness about shared parental leave also seems to be a problem.

In small businesses, shared parental leave may be seen as yet another burden for the employer and affordability is bound to be a problem. If you have any questions about shared parental leave for your staff, your local bookkeepers will be happy to advise you.

How the EU Referendum will Affect Small Businesses and Employers

June 23^rd 2016 is when the UK public will vote on whether or not to remain in the EU. If the result of the referendum is to leave, the government must notify the European Council. There will then be a two year period of negotiations before we can finally exit. Not until then will we know what kind of relationship we will have with EU countries or whether we can still have access to the single market. It is therefore difficult to predict the effect of a withdrawal on small businesses, but various people have suggested a number of scenarios.

The referendum date was decided after the Prime Minister had negotiated an agreement with all other EU countries to a package of reforms in the event that we vote to stay in. These reforms include an exemption from ever closer union and a four year ban on in-work benefits for EU member immigrants. Critics felt the high levels of immigration would not be reduced and Brussels would still retain unacceptable levels of power.

The Need for Information

After the referendum announcement in February, the Federation of Small Businesses (FSB) published research which found that, of 4000 small businesses polled, 42% had not decided how to vote. Most did not feel at all well informed. Members were asked what they needed more information on: almost half mentioned the economic impact on the country; 38% wanted more detail about the administrative load of regulation compliance; 33% wanted to know more about the cost of EU membership.

Mike Cherry, policy director at the FSB, said, “It is crucial that once appointed, both the ‘Remain’ and ‘Leave’ campaign groups tackle this information deficit. Smaller businesses want to know the practical impact that remaining within or leaving the EU would have on their firms.”

Will There be a Level Playing Field?

Another poll conducted by major accountancy firm, Moore Stephens, of nearly 500 owner-managed businesses found that 17% had already made their minds up that they wanted to leave the EU. This was mainly because they were concerned about “the excessive bureaucracy associated with EU trading regulations, especially in the food industry, and also because of the prospect of tax reductions which could benefit business," according to Mark Lamb, a Moore Stephens partner.

He also said, "Owner-managed businesses are concerned that future growth will be disproportionately hit by a UK exit as they would no longer compete on a level playing field in the EU. Economic and political uncertainty is already impacting trade for some SMEs, and there is a fear that leaving the EU could severely destabilise business growth in the long-run. Small businesses currently benefit from unrestricted access to the large European market and many could find increases in tariffs and potential trade restriction difficult to overcome, stifling international growth potential."

The Effect on Employers and Employees

In recent years, many small employers have found it hard to comply with EU regulations on workers’ rights. Our own government has recognised the difficulties and sought to alleviate them by, for example, increasing the qualifying period for unfair dismissal from one to two years, and capping the compensation that could be awarded. In 2013 it introduced a cost on applications for employment tribunals.

The TUC is therefore encouraging its members to vote to remain in the EU. Its general secretary Frances O’Grady said: “Working people have a huge stake in the referendum because workers’ rights are on the line. It’s the EU that guarantees workers their rights to paid holidays, parental leave, equal treatment for part-timers, and much more. These rights can’t be taken for granted. There are no guarantees that any government will keep them if the UK leaves the EU.”

Who to Believe

Meanwhile the Chancellor is making a very gloomy forecast about the economy if we leave, with everyone paying heavier taxes to keep the country going. Boris Johnson, MP and Mayor of London, who backs the exit campaign, appeared on our TV screens to tell us that this is totally wrong and we have a great future ahead of us if we leave.

Unfortunately no one seems to have definitive answers about what will happen if we leave. Entrepreneurs are, by definition, optimistic and eager to turn all eventualities into opportunities. Many of them will look to their local bookkeepers to help them ensure that their small businesses, with or without employees, will be prepared for whatever comes next.

National Living Wage: Common Questions Answered

Each time new regulations are introduced, they throw up many questions that need to be answered to be sure of compliance. On 1 April 2016 the national living wage (NLW) of £7.20 per hour became the minimum amount that employers could pay workers aged 25 or over. Here are our answers to some of the most commonly asked questions about this.

When did the NLW have to start?

On the first day of the pay reference period that fell on or after April 1^st.

What does not count towards the NLW?

To be sure that the NLW has been paid for any pay reference period, you should not include the following elements in the calculation: 

•  Employer pension payments
•  Repayments of expenses
• Benefits in kind
• Shift premiums
• Overtime
• Advances of wages
• Loans

When all these elements have been excluded, the worker should be paid a minimum of £7.20 per hour for every hour worked. The gross amount calculated can include bonuses, commission and incentive pay.

How should holiday pay be calculated?

You should include any regular overtime undertaken as well as a worker’s normal or average working hours when working out holiday pay.

Must I pay the NLW to apprentices who are over 25?

Yes, unless they are still in the first year of their apprenticeship, in which case the relevant band of the national minimum wage still applies.

What happens when a worker turns 25?

He or she will not be eligible for the NLW until the first day of your next pay reference period. They must be paid the NLW for the period following their birthday.

When will the NLW next increase?

The government intends to review all the statutory minimum wage rates to introduce any changes by April 1^st each year, beginning in 2017. The NLW rate will gradually increase until 2020, when it is intended to have reached £9 per hour.

How does the NLW apply to those paid a fair piece rate?

If they are over 25, these workers are eligible for an additional 20% on the normal NLW. You should pay them £8.64 per hour.

How will the NLW be enforced?

The consequences of not paying the minimum rates that apply could be financially crippling and are designed to be a good deterrent to non-compliance. An HMRC compliance officer can order an employer to pay any arrears to the workers and pay a fine of 200% of the underpayment for each worker. Serious cases may be criminally prosecuted, in which case there is no limit to the fines that can be imposed following a guilty verdict.

The questions listed above are those that are most commonly asked. If you are not clear about any of the answers, or have other queries, your local bookkeepers will be happy to help.