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Remuneration and benefits structures in the UK are subject to laws on equal pay, national minimum and living wage thresholds. More generally, there are standardised rules for calculating pay, as well as redundancy and notice pay, and annual leave.

A contract for employment between the employer and employee should outline periods and rates of pay, as well as benefits and expenses available. Employees should also be aware of their rights if the employer becomes insolvent.

Calculation of pay and entitlements

The standardised measure for employee pay is on a weekly basis. This rate is used to determine rates of redundancy pay, notice periods, holiday pay and guarantee pay.

If an employee is unable to determine their weekly pay, redundancy, notice pay and annual leave can be determined by calculating an average based on a 12-week period preceding the anticipated date of receipt.

National Minimum Wage and Living Wage

Depending on an employee’s or workers age, they are entitled to National Minimum Wage or National Living Wage. If over 16 years of age, they will be entitled to National Minimum Wage. At 25, they are entitled to National Living Wage. Any contract of employment that purports below this amount is not legally binding.

If it transpires that an employee has been paid below statutory minimums, HMRC has the power to order arrears to be paid immediately. Employers are mandated to maintain payroll records for three prior years.

Equal pay

The Equality Act 2010 mandates equal pay for male and female employers for equal work performed.

For larger public and private entities with 250 or more employees, regulations promulgated in 2017 under the Equality Act create mandatory annual reporting on gender pay gap disparities.

Insolvent employer and right to payment

When a business undertaking is no longer able to meet debts owed to creditors, it is said to be insolvent. In most cases, control of the business will be surrendered to a panel of administrators, who will shift priority of business operations towards satisfying amounts owed in an attempt to rescue the business. An insolvency practitioner will be appointed to represent the interest of the business.

Employees are entitled to claim sums owed to them via the insolvency practitioner, including statutory notice and redundancy pay. If the business in administration cannot meet these amounts, the government steps in to guarantee payments.

Employment Law - Information on Fees

For information on fees and funding relating to Employment Law cases, please see our information page.

Contact our Employment Law Solicitors Mayfair and throughout London Today

In order to avoid costly on the spot back payments to employees, as well as reporting to HMRC, an employer should have a firm grasp of statutory requirements for their payment and benefits structures.

At Lewis Nedas, our Employment Law Solicitors have over 25 years’ experience advising and representing national and international companies. Our Employment Lawyers have joined the Office Essential Network, which is a specialist organisation aimed at assisting young start-up businesses requiring advice on employment issues, including remuneration and benefits.

To speak to one of our Employment Specialists, please call us on 020 7387 2032 or complete our online enquiry form.

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