news - @theFCA sets out views on Employer Salary Advance Schemes https://www.fca.org.uk/news/statements/fca-sets-out-views-employer-salary-advance-schemes

It seems to me that the FCA has failed to address some relevant points. Thread: 1/

if these schemes are an advance on salary, why are they not reported to HMRC as such? Telling HMRC they are not salary advances and telling the FCA they are... doesn't seem right! 2/

In some schemes, the money is coming from the scheme provider not the employer and is only repaid from wages in future. If the borrower stops work or the employer goes under the scheme provider bears the risk Sounds like a loan to me. 3/5

Anecdotally repeat borrowing seems to be common. A useful fall back a couple of times a year is very different from a facility being used a couple of times a month which may indicate the original borrowing was unaffordable and has trapped the borrower in debt. 4/5

If the employee is on minimum wage and these are salary advances, then any deductions for fees seems likely to mean that the person is being paid below the minimum wage. 5/5