Explain the Legislative Requirements that Impact Reward Practice

The legislative requirements in the United Kingdom that impact reward practices are numerous and are centred around ensuring that employees are treated fairly and compensated reasonably for their work. These requirements help to ensure that employees are treated fairly and equitably in terms of compensation, benefits, and other forms of recognition. These requirements include the National Minimum Wage Act 1998, the Equality Act 2010 and the Working Time Regulations 1998.

National Minimum Wage Act 1998

This act sets the minimum hourly rate that employers must pay to workers. The current rate in the UK is £9.50 per hour for workers aged 25 and over and £9.18 for those aged 21-22 (BBC, n.d). This legislative requirement impacts reward practices by setting a baseline for pay that employers must meet and helps to ensure that employees are paid fairly for their work. Employers must ensure that they comply with the current NMW rates or risk facing penalties or prosecution.

Equality Act 2010

This act prohibits discrimination based on protected characteristics, including age, disability, gender, race, religion, and sexual orientation (GOV.UK, 2015). This applies to the recruitment process, the promotion process and the way in which wages and rewards are allocated. Employers must ensure that there is no discrimination in the way that rewards are distributed and that all employees are treated fairly and equally. This means employers must ensure that their reward practices do not discriminate against employees based on these characteristics. For example, employers must not pay employees of a particular race or gender less than other employees for the same work.

Working Time Regulations 1998

The Working Time Regulations 1998 states that all employees are entitled to at least 5.6 weeks of paid holiday per year and a maximum working week of 48 hours (Legislation.gov.uk, n.d). This legislation sets the maximum weekly working hours for employees and minimum rest periods and paid leave entitlements. This impacts reward practices by affecting the amount of time employees can work, and the amount of time they must be paid for. For example, employers must ensure that employees are paid for any overtime and not require employees to work more than the maximum weekly hours set by the regulations.

References

BBC (n.d.) National minimum wage act 1998 – legislation – national 5 business management revision – BBC bitesize, BBC News. BBC.

GOV.UK (2015) Equality act 2010: Guidance, GOV.UK. Available at: https://www.gov.uk/guidance/equality-act-2010-guidance.  

Legislation.gov.uk (n.d.) The Working Time Regulations 1998, Legislation.gov.uk. Queen’s Printer of Acts of Parliament. Available at: https://www.legislation.gov.uk/uksi/1998/1833/contents/made.