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    • Not Me Officer
    • By Not Me Officer 10th Jul 17, 11:10 PM
    • 280Posts
    • 49Thanks
    Not Me Officer
    Why would an employer not be interested in salary sacrifice?
    • #1
    • 10th Jul 17, 11:10 PM
    Why would an employer not be interested in salary sacrifice? 10th Jul 17 at 11:10 PM
    I did a bit of reading on this and from what i could understand of it it sounded like a win-win for employer and employee so off i went to my employer and asked.
    They came back and said no they're not interested. I asked why and they said that one of the reasons is because they would still have to pay employees who are on the sick and that if i go and spend more time looking in to it (funny that because i usually get told i look too much in to things) i will find many other reasons too.

    Where i work there is a bad record with people on the sick. Mostly a few days here and there. Fridayitis coupled with Mondayitis for LongWeekenditis. Some times people are longer. Someone just went 3 weeks today for example.

    So if they don't want to pay people who are on the sick then fair enough but what other reasons would they have for not being interested as when i read about it it sounded quite a good thing?
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    • Vaskor
    • By Vaskor 11th Jul 17, 4:01 AM
    • 8 Posts
    • 6 Thanks
    • #2
    • 11th Jul 17, 4:01 AM
    • #2
    • 11th Jul 17, 4:01 AM
    It sounds like the employer is just being lazy.
    • bowlhead99
    • By bowlhead99 11th Jul 17, 5:33 AM
    • 7,843 Posts
    • 14,319 Thanks
    • #3
    • 11th Jul 17, 5:33 AM
    • #3
    • 11th Jul 17, 5:33 AM
    'Sacrificing' gives you a lower contractual rate of pay in exchange for some fixed contractual benefit. So you can see why en employer might not want to provide that benefit if people don't actually show up to work and their normal protection from such abuse would be to have the person's pay docked.

    But generally although it sounds like a win-win for employee and employer, they can be costly/burdensome to administer, especially for smaller firms. It's not just doing a bit of paperwork for a couple of employees and diverting cash, but a whole exercise to inform and educate the workforce on how it works (to avoid potential employees later claiming they didn't understand it), administration of potentially running multiple schemes / plans (e.g. auto enrollment non-sal sac and the sal sac one), making sure people do not end up under the minimum wage and so on.

    Depending on how it's implemented and the figures involved there can be negatives for employee too, e.g. lower headline salary or wages when you are applying for a mortgage, potentially lower contribution-related state benefits if your NI contributions drop too low to qualify and so on. And for higher rate taxpayer the employee NI saving is only 2% so there's less incentive for staff to want to do it and therefore lower potential savings on the table for employers.

    If it's just you wanting to put away 100pm, that's only 13pm for them in saved NI and that typically does not pay for the advice on setting up and administering a company-wide scheme and the extra admin and compliance involved for them on an ongoing basis. 13 a month of extra revenue or saved costs is not a goal that most firms would find it's worth the business disruption to achieve. Obviously all the 13s add up so at some level it becomes worth doing but it is a fact of life that some small firms find running flexible benefits packages a chore.
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