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B968 - Payment of Overtime on Low-Hours Employment Contracts Bill (Second Reading) Watch

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    B968 - Payment of Overtime on Low-Hours Employment Contracts Bill (Second Reading), TSR Socialist Party



    Payment of Overtime on Low-Hours Employment Contracts Bill 2016

    A Bill to improve pay for workers with unstable or inconsistent income streams and to create incentives for employers to provide certainty

    BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-
    1. Definitions
    The following definitions are used in this Act:
    1. The 'Full-Time Threshold' shall be 32 guaranteed hours per week.
    2. The 'contracted hours' are the number of hours which are guaranteed to be paid for by the employer.
    3. The 'contracted wages' are the sum paid in remuneration of the employee's work by way of cash, or liquid property with a clear market value.
      a) Property is 'liquid' if it may be expected to be sold at or above market rate within one day.
      b) A market value is 'clear' if the property is subject to free exchange within a market where i) equivalent property is transferred several times per hour on average, and ii) a record of transactions is publicly maintained.
      c) The value of the property concerned shall be the market rate after transactional taxes, agent fees and other costs incurred by the vendor are deducted.
    4. An 'eligible employment contract' is one to which the National Minimum Wage applies, and where the employee is aged 18 or over.
      a) If an employee turns 18 within the duration of the contract, the contract shall become an 'eligible employment contract' from that point.
    2. Overtime payment on low-hours employment contracts
    1. On eligible employment contracts with less guaranteed hours than the Full-Time Threshold, any hours worked which are beyond the number of contracted hours must be paid at the Enhanced Rate.
    2. The Enhanced Rate shall be the following:
      a) For contracted wages between the National Minimum Wage (NMW) and 1.2 times the NMW, the Enhanced Rate shall be 160% of the contracted wage.
      b) For contracted wages between the 1.2 times the NMW and 1.5 times the NMW, the Enhanced Rate shall be 140% of the contracted wage.
      c) For contracted wages between 1.5 times the NMW and 3 times the NMW, the Enhanced Rate shall be 120% of the contracted wage.
      d) For contracted wages which are greater than 3 times the NMW, the Enhanced Rate shall be 100% of the contracted wage.
    3. The right to be paid the Enhanced Rate where specified by this Act may not be alienated through contract or through any other means.
    4. Any additional sums due under this section are payable in the same way as the contracted wage (for instance, where the contracted wage is paid through a mixture of stock options and cash, the additional sum may be paid through stock options or cash, but no through no other means), with the exception that payment in cash shall always be permissible.
    3. Requirement to retain record of employment contract
    1. The employer must retain, and offer to the employee a copy of a record of all non-written employment contracts, stating clearly the number of contracted hours and the contracted wage.
    2. Failing to do so may result in a fine up to 5% of the annual revenue of the beneficiary of the employee's work, payable by the employer.
    4. Civil claims for non-compliance
    1. Where an employee believes that section 2 or section 3(1) above is not being complied with by their employer, they may bring a civil complaint before the Employment Tribunal.
    2. An employee has standing to bring a claim under section 2 above if they can demonstrate the existence of a contract under which an Enhanced Rate of 101% or greater may become liable to be paid.
    3. An employee has standing to bring a claim under section 3(1) above automatically.
    4. If a successful claim is brought under section 2 above, damage consisting of impacts on the employee's personal life, including, but not limited to fees and interest payments incurred through debt, loss of property through debt or otherwise, and impacts on personal relationships as loss of amenity demages, should not be considered too remote.
    5. Criminal offence of non-compliance
    1. Deliberate and sustained non-compliance with sections 2 or 3(1) above shall amount to a criminal offence.
    2. The maximum penalty for non-compliance with section 2 above shall be six times the amount unpaid, or 10% of the annual revenue of the beneficiary of the employee's work, whichever is greater.
    3. The maximum penalty for non-compliance with section 3(1) is as defined in section 3(2).
    6. Exemption
    1. The Secretary of State for Work and Pensions shall maintain a list of professions exempted from sections 2-5 above, and may amend that list by order where a profession is one in which flexibility is required by the very nature of the profession.
    2. The Secretary of State may be required to consider the inclusion or exclusion of a profession from the exemption list in the following circumstances:
      a) There is a petition, with at least ten thousand signatures, requesting his consideration of a profession for inclusion or exclusion; and
      b) That profession has not been considered for inclusion within the preceding thirty-six months.
    3. When turning down a petition under subsection 6(2) above, the Secretary is required to give written reasons for his decision.
    4. The Secretary's decision either to include or not to include a profession in the exemption list shall be subject to judicial review.
    7. Commencement, Short Title and Extent
    1. This Act may be referred to as the Overtime Act 2016
    2. This Act will extend to the United Kingdom; and;
    3. This Act shall come into force on the 6th April 2017.




    Notes

    Policy explanation:
    Spoiler:
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    Zero-hour and low-hour contracts add flexibility benefits for the employer without any benefits being gained by the employee. Given the labour market is one with significant monopsonies, this needs state intervention to adjust for.

    This Bill requires that any hours worked over the contracted number of hours for employment contracts for less than 32 weekly hours are paid at an additional rate in order to compensate the employee.

    Changes for second reading:
    Spoiler:
    Show
    Added section 6 to exclude professions where ZHCs are used legitimately becuase of a need for flexibility (such as caring).
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    It's looking better.
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    I'm very much liking the look of this. Will inspect more closely after I've had some sleep.
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    This is such a moderate and eminently sensible piece of legislation that I fail to see how anyone could dislike it.
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    Aye!
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    Unintended possibly, but the option to insist to be paid in cash I thought was ended in the 1980s? Could this bring back being paid in cash as a tax evasion measure?

    The Bill seems to suggest that the Enhanced Rate must be payable, not that it is the minimum payable. Some people could get double time for working beyond their hours, perhaps on a Sunday, and this could be reduced. Again, unintended I am sure, and perhaps I should have noticed this on first reading.
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    (Original post by barnetlad)
    Unintended possibly, but the option to insist to be paid in cash I thought was ended in the 1980s? Could this bring back being paid in cash as a tax evasion measure?

    The Bill seems to suggest that the Enhanced Rate must be payable, not that it is the minimum payable. Some people could get double time for working beyond their hours, perhaps on a Sunday, and this could be reduced. Again, unintended I am sure, and perhaps I should have noticed this on first reading.
    I echo this

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    Other than the point barnetlad made, I find this to be a very interesting proposal.
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    (Original post by barnetlad)
    Unintended possibly, but the option to insist to be paid in cash I thought was ended in the 1980s? Could this bring back being paid in cash as a tax evasion measure?

    The Bill seems to suggest that the Enhanced Rate must be payable, not that it is the minimum payable. Some people could get double time for working beyond their hours, perhaps on a Sunday, and this could be reduced. Again, unintended I am sure, and perhaps I should have noticed this on first reading.
    Regarding the cash point: it is at the employer's discretion which of the valid methods to pay with. I made a bit of a language mistake as I used 'cash' to mean 'money'; but the intention is to prevent employers from making up the additional sum from, for instance, stock.

    The wording error which might cause the second problem will be amended for third reading, as will the language of 'cash'.
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    (Original post by Wellzi)
    Other than the point barnetlad made, I find this to be a very interesting proposal.
    If there is anything else you're uncertain about, just let me know.
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    This has gone to a third reading
 
 
 
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