I was scrolling through Twitter this morning when I spotted the front page of the Financial Times. The headline reads “Sorrell feels the strain as WPP is ‘walloped’ by ad spending cuts”.

The reason this caught my attention, was I’d recently presented the CIPP Payroll and HR Legislation Update course in Leeds and a section of the presentation relates to “CEO pay ratios reporting”.

Apparently, according to the House of Commons Library, Martin Sorrell, the CEO of WPP, was the best paid CEO in the UK. In 2016 he was paid £48,000,000!! Yes, 48 million pounds in one year, that’s 826 times more than the average pay of an employee. Believe it or not, his average is down when compared to the year before, in 2015 he was paid 1,336 times more than the average pay of an average employee.

The article can be found in the House of Commons Library. https://commonslibrary.parliament.uk/economy-business/work-incomes/pay-it-forward-the-meaning-of-company-pay-ratios/

The high levels of executive payments have been subject to general debates for many years, but the government has now expressed concerns as the rate of the increases, certainly over the last two decades, in executive payments when compared to pay generally. So, the government is now starting to act. In August 2017, the government announced new reforms which include:

• Financial Reporting Council (FRC) to revise UK Corporate Governance Code

• Require *quoted companies to explain executive remuneration in context of wider pay

• New legislation to require annual reporting of ratio of CEO pay to average UK employee, with narrative

*Quoted companies are those listed on the Main Market of the London Stock Exchange.

In December 2017 FRC released its consultation document on reforms. http://frc.org.uk/getattachment/31897789-cef6-48bb-aea9-f46b8cf80d02/Proposed-Revisions-to-the-UK-Corporate-Governance-Code-Dec-2017-1.pdf

Interestingly, Richard Howson, CEO of Carillion, was paid £1.5 million pounds in 2016, he’s a local lad too, lives in Skipton according to The Construction Index website.

Thanks for reading!

Jo Marshall

Yorkshire Payroll Services Ltd

I’ve seen a few entries on Facebook where people have stated they are working 13 hour shifts, or are missing the football match again because they were working overtime on a Saturday.

Did you know, the national minimum wage for people over 25 is £7.50 per hour, it increases to £7.83 in April 2018. If your pay falls below this amount, your employer must top up your pay. For example, if you work over and don’t get paid for that time, or you are asked to come into work before your shift officially starts, or to stay behind to go through security checks, these hours are all included in national minimum wage calculation. It is these areas that Argos neglected to include in their employees pay, Ryan Air are the next to face investigation.  

Holiday pay. If you do work overtime on a regular basis and you are paid for the extra hours you work, your employer should be including the average overtime you have been paid into your holiday pay. For example, your normal salary is for working Monday to Friday, but you regularly work on a Saturday and are paid for those extra hours. When you go on holiday, if you are only paid for the normal Monday to Friday hours, you are receiving less pay than you normally would. From a legal point of view, you are therefore being deterred from taking your holiday leave entitlement.

Because of this, recent legal cases have highlighted this fact and in general, workers should receive the same pay while they are on annual leave as they normally receive while they are at work. They should not be deterred from taking leave because they are paid less while they are on leave.  

For those people who receive Commission payments, recent cases have confirmed that Commission payments should also be included in the holiday pay calculation. We are now waiting for the calculation method to be confirmed; e.g. average over the last 12 weeks, last 52 weeks etc.

Watch this space, if Commission payments are to be included in the holiday pay calculation, what could be next??

Thanks for reading!

Jo Marshall

Yorkshire Payroll Services Ltd