The government is cutting minimum wage red tape on salary sacrifice schemes. High profile cases, like Iceland’s Christmas savings club, saw employers penalised
for diverting earnings to saving schemes for their employees which took their pay below the minimum wage. In future such schemes will be permitted,
subject to conditions such as making good the shortfall.
There’s also good news regarding the methods for calculating hourly pay rates for workers for minimum wage purposes. The changes are expected to apply
from 6 April 2020.
In future you won’t be fined for offering salary sacrifice and other schemes to workers where initially this causes their pay to fall below minimum wage
rates. The methods for calculating hourly pay rates are also being changed from 6 April 2020.