Political parties have released their manifestos; their plans for ‘making Britain brilliant’ on a range of economic, societal, environmental issues. Each party has made promises around issues related to pay and reward. In this blog, we’ll take a look behind the political spin and find out what the manifestos could mean for HR in your organisation.
Equal pay
Equality and the gender pay gap are issues high on the agendas of the main political parties for the next Parliament; the majority are pushing new rules on gender pay transparency. Labour, the Conservatives and the Lib Dems all have plans to require large companies of more than 250 employees to publish details of the differences between the average pay levels of men and women in their organisation.
What this means for you
- Get on the front foot and start tracking equal pay in your organisation now. If you are unsure about your position on equal pay, consider getting an audit done.
National Minimum Wage & Living Wage
Low pay has been a problem for years. All parties are planning to increase National Minimum Wage to £8 or more by the end of this decade. The greatest increase is promised by the Green Party who plan to increase NMW to £10 by 2020 as well as creating 1 million public sector jobs that pay at least Living Wage. Labour’s ‘Make Work Pay’ contracts will give tax rebates to businesses who sign up to Living Wage in the first year of a Labour Government. The Lib Dems have vowed to establish an independent review to consult on how to set a fair Living Wage across all sectors and are planning to pay Living Wage in all central government departments and their agencies from April next year.
As with gender pay transparency, both Labour and the Lib Dems have plans to require companies to report on Living Wage. A Labour government will want to know whether or not public listed companies pay it. The Lib Dems will take it a step further by requiring business to publish the number of employees they have who are paid less than Living Wage as well as the ratio between top and median pay.
Through raising the personal tax allowance to over £12,500, the Conservatives, Lib Dems and UKIP are planning to take those on Minimum Wage currently, out of tax completely.
What this means for you
- Find out your business’ stance on living wage. What is the gap between minimum wage and living wage in your organisation and who does it affect?
- Think about getting a strategy in place to review increasing your lowest paid workers to living wage.
Zero hours contracts
There’s been much debate around zero-hours contracts and what benefits they can bring to businesses but also the drawbacks they mean for employees. The Lib Dems and UKIP would like to see a right to request a secure contract for zero hours workers after a period of time. Labour, on the other hand are promising to ban this kind of employment contract altogether.
What this means for you
- Understand the numbers behind zero hours contracts – how many of your employees are on them and for what reasons?
Additional leave
Plans for parental leave have been announced in some manifestos. Labour and the Lib Dems both plan to enhance current arrangements for shared parental leave; Labour will double paternity leave to four weeks and increase pay to more than £260 a week, and the Lib Dems will provide parents with an additional ‘use it or lose it’ month to encourage new fathers to take more time off work. Labour will also increase free childcare from 15 to 25 hours per week for 3-4 year olds.
The Conservatives also announced plans to give those who work for a large company or the public sector, an entitlement to take fully paid leave to volunteer for three days per year.
What this means for you
- Make sure you are up to date with the recent changes to shared parental leave.
- This is one to watch out for – more and more companies are using additional leave as a differentiator to attract or retain people.
Executive remuneration
Pay and bonus for executives is always a controversial topic in the news. To try and get on top of that, some parties have shared ideas for executive remuneration. The Conservatives are promising that under their government, they would ensure that new pay structures for bankers reduce short-termism and remain subject to ‘tough’ deferral and clawback rules. Labour would like to see a better link between executive pay and performance by simplifying pay packages. Moreover, both Labour and the Lib Dems have promised to make sure there is employee representation on remuneration committees.
What this means for you
- Transparency around pay is a good start here. Being open about how you manage pay (normal and executive) in your organisation is key – do your employees know your pay policies and processes? Do they know about Rem Comm?
It’s clear that there are number of things that could change for you in HR as a result of the General Election. It doesn’t matter which party succeeds this Thursday, there are things you should start planning for now, no matter what the outcome.
Find out more about the manifestos:
- Labour
- Conservatives
- Liberal Democrats
- UKIP
- Green Party
