Companies can easily avoid being named and shamed for failing to meet minimum wage requirements with a little employment law know how, says HR Team Managing Partner Breda Cullen.
“The latest tranche of companies to be named by HMRC as failing to pay staff the minimum wage included 113 organisations, all of which could have stayed out of trouble with the help of an employment law expert,” she said.
LACK OF EMPLOYMENT LAW CONSULTANCY
“The organisation at the top of the list was Monsoon Accessorize Ltd, which failed to pay £104,508 to 1,438 workers, and the explanation given for the default shows just how easy it is for a company to find itself in hot water.”
Monsoon Accessorize’s wages dipped below the minimum because the company had a policy of offering staff discounted fashions to wear at work. The cost was deducted from their wages, dipping them below the legal threshold.
The company said the issue only came to light when HMRC reviewed its payroll system.
Monsoon said it acted quickly to ensure minimum wage requirements were met in the organisation to prevent any recurrence.
ENSURING EMPLOYMENT LAW COMPLIANCE ON PAYING STAFF
Ms Cullen said: “The case highlights the importance of ensuring companies exercise vigilance in their payroll systems.
“Accurately calculating pay to ensure that the national minimum wage is adhered to is the responsibility of all employers but there are pitfalls they should be aware of.
“Employers need to be aware that most payments and benefits do not qualify when working out employees’ pay to meet minimum wage requirements. The easy way to ensure compliance and peace of mind is to seek professional advice from employment law experts like HR Team.
CHANGES TO THE MINIMUM WAGE
“Employers should also be aware that from April 2016 all working people in the UK aged 25 and over will be entitled to a statutory minimum wage £7.20 per hour. The current national minimum wage for those under the age of 25 will continue to apply.”