Earlier this year, an NHS trust landed itself in hot water after it asked staff to repay a one-off Christmas bonus that was wrongfully given to them. These types of mistakes, while common, can be difficult to negotiate, as any requests to return payments are rarely received well by employees and can create a hostile work environment. It is imperative that in these situations, businesses act quickly and decisively, taking swift action to recover the money while also managing delicate employee relations.

Common mistakes 

The two most common circumstances that lead to incorrect pay are:

• a ‘mistake of fact’, for example, human error; or
• a ‘mistake of law’, for example, if the national minimum wage is raised without the company knowing and adjusting.

However, regardless of how an error in payment occurs, the employer is always entitled to try to recoup the overpayment.

Recouping overpayments 

Most businesses have deduction clauses in their contracts which mean that they can take the equivalent sum from an employee’s future pay cheque. Deduction clauses mean that businesses do not have to go through the court system to recover funds as employees have already agreed to that solution upon signing their contracts, and businesses should seek to review or add in these clauses where appropriate to smooth the process should an incorrect payment occur. Equally, it is imperative that employers ensure that the affected payslips are clearly itemised and logged with HMRC to make the deduction lawful.

Typically repayments are taken in a series of instalments. However, an employer can also choose to take back the overpayment as a lump sum, using the employee’s entire paycheque if required, as correcting an overpayment is one of the exemptions listed by the law that ensures employees receive the national minimum wage.

Whilst a lump sum deduction is a legitimate option for employers, it is very unpopular among employees who depend on regular wages and would only be recommended in the case of an employee leaving the business, after which it would be impossible to recover the funds.

How to recoup an overpayment, when there is no deduction clause in place 

If a deduction clause is not in place, a business must go to court in order to recover the funds. In most cases the employer will be entitled to take the money back, but it should act quickly. If the mistake remains undetected or is not acted upon on after two months or so, employees can present a ‘change in circumstance’ defence which could mean that they have spent the money or that their financial position has changed making them unable to repay the sum.

Whether a business has deduction clause in its contracts or not, maintaining good relationships with employees needs to be a top priority, as it will be beneficial should a mistake in pay occur. Incorrect payment situations can damage a business’ reputation within the workplace long term if not handled sensitively, disrupting the day-to-day environment. To avoid this, employers should be as transparent as possible about how the mistake occurred, what is being done to amend it and what steps they will take to ensure it does not happen again. Any communication about the situation should be clear and professional, and come from a person in a position of authority or a member of the senior leadership team.

Preventing incorrect payments 

To prevent incorrect payments being distributed, businesses should have protocols in place for payment information being updated and checked prior to funds being transferred to the employees. This means ensuring that any promotions, change in hours or overtime payments are recorded at the time and verified prior to payday, creating an evidenced paper trail.

Businesses should also take steps to ensure that they are aware of any and all changes to relevant pay laws, such as the national minimum wage. Making HR teams aware that they need to keep up-to-date with this and any other legislative changes that affect employee’s pay will increase the chance that the change is noticed and can be acted upon prior to the next payday, mitigating the risk of mistakes.

Diligence is imperative to avoiding any form of incorrect payment and having measures in place to avoid them occurring will not only keep a business from potentially going to court, but will also maintain employees’ trust. If a mistake is made, solving it quickly and efficiently in a sensitive manner will be beneficial for both the business and its employees.

Employment

Contact: Matt McDonald  matt.mcdonald@shma.co.uk

Philip Pepper philip.petter@shma.co.uk

The most recent Statement of Changes to the Immigration Rules were announced in a written statement to the House of Commons on 9 March 2023.

We look at the introduction of the Electronic Travel Authorisation (ETA), including what it is, who can apply and when it takes effect from.

What is an Electronic Travel Authorisations?

An Electronic Travel Authorisation (ETA) is a new requirement for people visiting the UK. It will be electronically linked to your passport and will give permission to travel to the UK for:

• up to six months for tourism, visiting family and friends, business or study;
• up to three months on the Creative Worker visa concession; or to
• transit through the UK.

Summary of changes

The ETA scheme will eventually apply to all visitors wishing to travel to the UK (excluding British and Irish nationals) including non-visa nationals who currently are not required to apply for a visa prior to travelling to the UK as a visitor.

The scheme has been introduced as part of the Home Office’s plan to strengthen the UK’s border.  The expectation is, the introduction of the scheme will provide increased knowledge about those wishing to travel to the UK which will in turn allow the Home Office to prevent criminals entering the UK prior to their travel.

How do you apply for an ETA?

Although the full details are yet to be revealed, the Home Office has confirmed the process will be a ‘quick, light touch and entirely digital with most visitors applying via mobile app and receiving a swift decision on their application.’

It is expected the cost will be in line with similar international schemes but the exact cost is yet to be revealed.  If successful the applicant will have permission to make multiple visits to the UK during the two-year validity period.  When that period comes to an end, a further application will be required.

Who can apply?

Qatari nationals will be the first to apply.  The scheme is due to open on 25 October 2023, for those who intend to travel to the UK from 15 November 2023.  From 1 February 2024, the scheme is due to open for the following nationals who wish to travel to the UK from 22 February 2024:

• Bahrain
• Jordan
• Kuwait
• Oman
• United Arab Emirates
• Saudi Arabia

It is anticipated by the end of 2024, all nationals (excluding British and Irish nationals) will be required to apply for an ETA prior to traveling to the UK as a visitor.

How can we help?

When the full details of the ETA application process are announced we will be able to support you with the application.

If you receive a negative response following the ETA application you will be required to submit a visa application seeking permission to travel to the UK.  We can advise you on the prospects of success and support you with the visa application, providing representations dealing with the issue highlighted following the ETA decision.

If you would like to discuss this visa route contact Calum Hanrahan at calum.hanrahan@shma.co.uk.

Overseas / Immigration

Contact: Calum Hanrahan calum.hanrahan@shma.co.uk

With more businesses obtaining sponsor licences than ever before, it is imperative that employers who sponsor foreign workers are fulfilling their sponsorship duties and obligations.

From today (3 April 2023), employers need to be aware of updates to the sponsor guidance on various matters, to clarify the reporting position for hybrid working patterns and new reporting obligations for offshore workers.

What do employers need to know?

Remote and hybrid working

Certificates of sponsorship assigned from 3 April 2023 refer to ‘normal work location’ rather than ‘work location, and the updated guidance requires sponsors to report if a worker is moving to:

• working remotely from home on a permanent or full time basis; and
• hybrid working patterns defined as “where the worker will work remotely on a regular and planned basis from their home or another address (work hub space) that is not a client site or listed address on their licence.

Employers are not required to report any day-to-day changes in work location if occasionally working at a difference branch or working from home. It is only regular working patterns that need to be observed and reported.

Offshore workers

From 12 April 2023, if a sponsored employee is working offshore, employers have a duty to notify the Home Office with specific information, including when they first arrive at the beginning of the job for which they are sponsored for, and when they leave the UK at the end of that job. They must do this by email to a designated Home Office inbox, and not via the Sponsor Management System.

Such reporting must be made no earlier than the date they arrive in or leave the UK and no later than ten working days after the date the worker arrives in or leaves the UK. Reporting is not necessary for workers temporarily leaving the UK for holiday.

Other reporting duties

In addition, there has been changes to the guidance on general reporting duties outlined in the sponsor guidance where a sponsored worker:

• does not start work within 28 days,;
• is absent without pay for more than four weeks (or absence on reduced pay) and any unauthorised absences of more than ten consecutive days that requires specific information to be reported.

Compliance duties

The sponsor guidance refers to general compliance with UK law and has added more examples of non-compliance which includes, ensuring, where required, employees are enrolled on a pension scheme, not being subject to UK or UN imposed sanctions and paying VAT or other duties penalties.

General compliance duties also now explicitly confirms that checks may be taken on employers based on a “poor previous record of compliance” with the Home Office or other government departments.

If the Home office believes employers have breached their sponsor duties, whether unintentionally or otherwise, that poses a threat to immigration control, they may decide to revoke a licence and remove employers from the register that can have tremendously damaging consequences for employees and the business.

How can we help?

Our immigration experts are on hand to support you with making sure you get it right first time, and ensuring compliance with the latest UK immigration and EU legislation.

If you would like to discuss our audit services packages we have available, please contact Calum Hanrahan

Overseas / Immigration

Contact: Calum Hanrahan calum.hanrahan@shma.co.uk