Avoid HMRC fines for minimum wage breach
Recently, 179 employers were fined by HMRC for breaching minimum wage legislation. They were also named and shamed. Fines totalling £1.3 million were levied, in addition to back pay awards of £1.1 million. And let’s not forget the cost of reputational damage.
It is not a situation you want to find yourself in. But could you inadvertently be in breach of the minimum wage laws? Even large companies – Wagamama’s and TGI Fridays – were caught out in this latest purge. And it is no coincidence that many of the companies were restaurants, catering venues or hair and beauty salons where staff are often on minimum wage.
Typically these types of establishments have a dress code, for example requiring staff to wear black trousers, white top and black shoes. The sort of clothes all of us have in our wardrobe. But for HMRC this is a uniform and should be bought by the company.
The HMRC definition of a uniform is any specific clothing that you stipulate employees must wear. So the cost of those clothes is deducted from the minimum wage payment and low and behold they have breached the regulations.
They not only have to pay the back pay to the employee but HMRC will fine them 200% of the total amount owed to staff.
Understanding your pay period is an important aspect of getting this right. Whether you pay your employees monthly or weekly could make all the difference as to whether uniform costs take staff below the minimum wage. The solution is simple if this affects you. You either need to provide the uniform yourself or pay a reimbursement for the cost of the specific clothing.
Everyone reading this will know one place where the staff wear a uniform. We are sure if you tell them about this they will be very grateful and you may even find a few extra chips on your plate. Or better still, point them towards The HR Dept so we can help them avoid all the employment pitfalls.
Should women disclose pregnancy at an interview?
In a recent YouGov survey, six out of ten small to medium sized business owners believed women should disclose whether they are pregnant during the recruitment process. And 41% said that pregnant employees put an unnecessary burden on the workplace.
Any manager tempted to act out these views, would be seriously advised not to. It is illegal and you can be taken to a tribunal even if the recruitment process went no further. If the judge finds against you, and they take a dim view of any form of discrimination, the best case scenario is likely to be paying an award for injury to feelings.
If the tribunal decides that were it not for discrimination, the candidate would have got the job, it could get much more expensive. Compensation may have to be paid for the financial loss of the person not getting the job.
But let’s not dwell on those penalties. What about the benefits of having a progressive, family-friendly attitude to business? Acting in accordance with the law and supporting a woman through pregnancy is likely to leave you with a good will dividend that may prove very valuable over time. Think of the loyalty and commitment to your company, as well as the experience retained.
One good practice to consider in this area is to advertise roles as being flexible, including part time or as job shares. There are many talented people either with families or thinking of starting one, and this can be an excellent way to recruit from this pool of high quality staff.
The Working Time Regulations 1998 state that all staff working for more than six hours must have a 20 minute break away from the workstation (four hours for under 18s). But Public Health England are going a step further, saying that sleep and recovery should be embedded into an organisation’s culture.
They explain that after just a short period of reduced sleep, people are less productive at work and more likely to succumb to infection. Brain function also deteriorates increasing the risk of accidents.
But by providing a quiet space where staff are able to rest, you can reduce stress and improve sleep patterns in them.
Lower absence rates and fewer accidents looks like a winning combination to us. So if you want to review working patterns, do talk to The HR Dept.
April is the big time for payroll changes. On 6 April, new Living Wage and National Minimum Wage rates kick in. See the latest rates in The Indicator, just below this article.
A detail that does sometimes get forgotten regards apprentices: if 19 or older, they’re entitled to the age-appropriate minimum wage after their first year of apprenticeship.
Employers also need to be mindful of employees’ birthdays. Higher wage rates become an entitlement immediately following a birthday that takes them into the next bracket. Fortunately our Toolkit personnel system can remind you of all such important dates.
Another change this 6 April affects termination payments. HMRC are ironing out a quirk that allowed pay in lieu of notice to be tax free if it wasn’t a contractual provision. Now, this will be subject to tax and National Insurance. We await HMRC guidance on post-employment notice pay (PENP) as to whether this also includes bonus and commission payments.
Equal pay claims soar
Some of the UK’s largest supermarkets are facing supersized equal pay claims. Morrisons is the latest to be targeted. The crux of the claim relates to whether jobs are of comparable value to a company, rather than how much the individual tasks of roles differ.
In this case, warehouse staff (mainly men) have been paid approximately £2 per hour more than shop floor staff – who are mainly women. If the two roles are deemed to be of equal value, it is irrelevant, for instance, if one involves heavy lifting whilst the other is customer service. They should be paid the same.
It shows the level of care that needs to be taken when working out remuneration structures. Taking expert advice is the best way of ensuring you don’t inadvertently breach equal pay laws.
What would you do?
When it was announced that Ant McPartlin had been arrested for drink driving, most of us felt sympathy for this popular North East legend and hoped he could get his life back on track.
But what if he was an employee coming into work today? How would you react?
Would your decision to support be based on the employee’s likeability, or would you manage to be objective?
There really are no easy answers, but consistency in your approach to managing staff is essential. This is where our Advice Line clients find talking through difficult situations with an HR Dept adviser really helps.
Also, if there is reputational damage our Crisis Communication team can be there to help manage any press interest.