Offering Childcare Vouchers as an employee benefit is a great way to help working parents meet their childcare costs and aid recruitment and retention of experienced staff. Workers near the minimum wage are often those most in need of this benefit to help them pay for childcare. If Childcare Vouchers are operated as a salary sacrifice scheme, it is the responsibility of employers to ensure that once deductions have been made, no employee’s salary falls below the National Minimum Wage levels. If this check is not made, the employer could fall foul of the law.
A recent case cost a major company £35k after an investigation by the HMRC for just this situation. Whilst an employee agrees that their wages are effectively cut in exchange for benefits, it is up to the employer to check they are not paid less than the current minimum wage rate of £6.08 per hour (for staff aged over 21).
Busy Bees Benefits has always prided itself on excellent customer service in terms of the operation of the scheme, ease of registration, support and service standards. When signing up to its Childcare Voucher scheme, employees complete a basic earnings assessment electronically which asks them to declare their gross earnings and any pre-tax outgoings – including any other salary sacrifice schemes such as cycle to work, some pension schemes and some car schemes. The system then automatically calculates whether or not they would fall below the minimum wage threshold. If the amount of vouchers they request takes them past the lower limit, the system automatically tells them the maximum amount of vouchers they can claim, or lets them know if they cannot request Childcare Vouchers at all. Busy Bees Benefits is also ensuring that existing scheme users are not breaching legislation by requesting that the employee re-enters their salary details annually.
John Woodward, managing director of Busy Bees Benefits, said: “It is important that as a Childcare Voucher provider, we help our customers – both employers operating our scheme and parents requesting our vouchers – to remain compliant with legislation. Our system is easy to understand, will take customers just a matter of moments to complete and ultimately protects vulnerable employees whilst helping busy employers meet their legal obligations. ”