Just over 200 businesses, including some of the country’s best-known retailers, have failed to pay the minimum wage. They will have to repay workers and face penalties of up to £7 million.
The minimum wage rules can be complex. The fact that some major retailers have been caught out shows just how difficult compliance can be.
Businesses were not compliant in one particular area, which relates to uniforms. The rules vary depending on whether uniforms are mandatory as a condition of employment or optional.
- If the employer requires employees to wear specific uniforms, any deduction to cover the cost reduces their pay for minimum wage purposes. Likewise, if employees have to reimburse their employer or buy the uniform themselves.
- In the case of optional uniforms, pay is only reduced when the employer deducts from the employee’s pay.
The other major problem area was paying correctly for time worked. This is not anywhere as simple as might first appear as illustrated by these examples:
- Being on standby near the workplace counts as working time, but not if the worker is on standby at home nearby.
- Travelling between assignments counts, but from home to the first assignment, and then from the last assignment back home does not – unless the first and last trips are by train and the employee is working on their laptop.
They can charge a penalty of up to 200% of the unpaid wages, with a maximum of £20,000 per employee. However, they will reduce the penalty by half if you pay the unpaid wages and penalties within 14 days.
Non-compliant employers will also be named and shamed, even where minimum wage underpayment is not intentional.
It is worth taking advice if an employer has any uncertainty over their wage position. A business can check if it is paying the correct amounts of National Living Wage and National Minimum Wage using HMRC’s calculator here.
How can we help you?
Numerous businesses across the UK have failed to pay the minimum wage. If your business is unknowingly in the same situation and you need help to rectify the matter, please contact us on 01444 716946 or on 01273 963656 or alternatively email us here.