(Solution) CIPD 5HR03 legislative requirements that impact reward practice. (AC 2.4)


Equality Act 2010

Equality Act 2010 can apply to reward practices in order to prevent any form of discrimination when rewarding people. By law, employers are required not to pay or reward employees less or offer them employment terms and conditions that disadvantage them because of their sexual orientation, disability, gender, race and other protected characteristics (Acas, 2023). Equality Act 2010 also covers the equal pay law that outlines how men and women should be paid. For example, for Body Image to ensure fairness in rewards, it must pay men and women doing similar work or work of equal value equally. These include equal wage, equal holiday pay, pensions, overtime pay and annual leave allowance. Body Image can only pay men and women who are doing similar work differently when one’s skills and qualifications are crucial for the job.

National Minimum Wage Act 1998

By law, employers are expected to pay employees a minimum wage per hour. Body Image should note that minimum wage applies for different ages and should comply with it to avoid legal claims and issues of discrimination. The different ages and their current rates are; age 23 or over (£9.50), Age 21 to 22 (£9.18), Age 18 to 20 (£6.83), Under 18 (£4.81) and apprentice (£4.81) (Acas , 2023). These different wage rates ensure every group workers gets a better pay that can help them meet their needs. Body Image may even pay more than the current rate per hour but should not be below that. Paying employees below the minimum wage will constitute to breaking the law and this can have legal risk to the company and the ability of Body Image to attract and retain talents will be a challenge.

CEO Pay Reporting

The Companies (Miscellaneous Reporting) Regulations 2018 require organisations that employ at least 250 employees in the UK to report the ratio between CEO’s remuneration and full-time employees’ remuneration (Cotton, 2022). This applies to Body Image pay structure for employees and CEO. Body Image should publish the ratio between what employees are rewarded and the company’s CEO. Body Image should also include a report of changes in the CEO reporting ratio and measures used to calculate the ratio. A smaller CEO Pay ratio could reflect that Body Image is committed to equity and fairness.

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