I work in HR for a company with c500 employees. I'm new to the role and my background is training so this is new to me. One of the things I did upon starting was a few audits of data, salary checks etc. I looked at whether we were paying NMW. In previous roles this is mainly a problem with apprentices who age into other pay bands etc, but we pay a lot above gov apprentice rates so we're good there. However I have discovered a problem with some quite highly paid employees and don't know is what to do.
We have group of employees all on £40k plus who are contributing 50% into the pension scheme via salary sacrifice (so pre tax). Our payroll is set up so that no one can make a salary sacrifice election that sends them below NMW. However sometimes these employees do overtime which is also pensionable. We have a situation where these overtime hours, less the 50% AVC contributions push them under NMW especially if they are also buying other things through salary sacrifice (we offer things like bikes, childcare etc.) It's not a lot- usually less than £0.50 per hour on the month they do overtime but I'm aware we're not legally compliant.
The payroll system isn't capable of picking this up in advance, only retrospectively once we've paid them which is illegal.
I'm not sure what the options are. ATM it seems like we need to keep a list of all employees who pay lots into their pension and then calculate whether we can let them do overtime? The business doesn't want pay them a higher rate than anyone else as it's unfair but that means we'd have to reduce their pension % randomly each month as needed and that's logistically impossible.
Otherwise we stop letting them do overtime which will not go down well!
We also have to do back pay of a few hundred pounds to each of them to make us NMW compliant which is frustrating the LT as these are people earning £50k plus with OT.
The employees aren't bothered by NMW- they are very well paid for their industry and it's a personal financial decision that is causing this. It's obviously not the spirit of what NMW legislation is trying to achieve but I'm holding firm and saying regardless we can't break the law.
Does anyone have any suggestions?