The key theme across the Islands presently is a scarcity of resources, which will bring remuneration strategy in its broadest sense to the forefront of business thinking for the upcoming year.
Employees will increasingly consider all aspects of their remuneration package. So, whilst base salary needs to be competitive, other factors like hybrid and flexible working are now considered the norm for many employees.
Of course, there is legislation that every employer needs to keep on top of, but what about the full package that will attract new talent and retain the employees you already have? Flexible benefits have been around for many years, but are they still relevant or are businesses moving towards rewarding activity relating to ESG? Some big companies like Google and Microsoft are even considering pay cuts for those who choose to work from home.
Many people entering the workplace are now looking for emotional engagement on top of reward and recognition. So, this needs to flow into your renumeration strategy and the benefits you’re prepared to provide.
RPI has always been a great indicator of what employers across the Island will use as their starting point. For employers using RPI as their base for annual salary reviews, the September 2021 RPI report shows an increase of 2.9 per cent in Jersey and 3.2 per cent in Guernsey.
As arrangements for remote working become the norm, employers will need to understand both the relative salary differences and the tax, social security, and other legal consequences of these more permanent arrangements if overseas working is playing a part.
In early 2022, we’ll be looking at specific remuneration trends across the Channel Islands and a forecast for the coming year to help you with your business planning.
Several changes are being implemented with effect from 1 January 2022 that may affect your payroll activities in Jersey:
- The statutory minimum annual leave entitlement will be increasing from two weeks per year to three weeks per year. This change means anyone on a zero-hour contract must have their rolled-up holiday pay increased to 6 per cent as a minimum from the current four per cent.
- Any employee who works continuously for six hours is entitled to a minimum rest break of 20 minutes. Pay consideration for those who work six-hour days must be discussed and agreed upon before implementation.
- The minimum wage will increase to £9.22 per hour. Year one trainees will receive £6.91 per hour and year two trainees will receive £8.07 per hour.
- Combined employer returns (CER) – the way you submit your tax, social security contributions, and manpower returns are changing and be submitted on a single return. The switchover date is January 2022, with the return being due on 15 February 2022.
- A minimum earnings financial limit will replace the eight-hour social security contributions rule. Once you reach this threshold, primary and secondary contributions are payable.
If you have any queries or need support implementing any of the above, please contact Val Cartwright, who specialises in numbers for people.
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