Boohoo is no doubt a legitimate employer which rewards its employees fairly and lawfully but, if you can forgive the pun, they have been caught up in a lot of boohoo about the National Minimum Wage. Legitimate employers may wonder how an employer, with whom they may be competing, can cheat the National Minimum Wage.
The loophole is relatively simple, the employee is paid for approximately half the hours she works. All the records suggest, for example, that she had worked 25 hours when in fact she worked 50 hours. The falsified records show she was paid the National Minimum wage for those 25 hours when in fact she worked a further 25 hours – unpaid! She may even be able to top up her wages using Universal Credit. So long as no-one blows the whistle, or those that hear it ignore it, HMRC will not notice.
Boohoo got caught out because it simply did not know enough about their supply chain. Its share price halved in consequence. Employers might want to look at the policies that they have in place and the ease with which employees can access them. More pertinently, they may want to check their supply chain – to make sure their suppliers have such policies.
Online policies can be open and transparent. Employees, customers and suppliers can see their content and for this reason many of our clients place Employee Handbooks on their websites.
Here are some policies that you might expect a legitimate supplier to have (and which you should probably have yourself!):
- Anti-slavery and human trafficking
- Eligibility to be employed in the UK
- Ethical trading
- Equal opportunities
- Grievance procedures
- Harassment and bullying
- Whistle-blowing
Is slavery taking place under your nose
Safeguard your migrant workers
Staying on the right side of equality law
Uber fires staff for harassment – a good idea?
Tips to avoid the headlines
Those who are isolated from the main strands of society either through family, culture or modern slavery are especially vulnerable.
Individuals who are not British, EEA or Swiss nationals need to have a visa or you may be able to apply for a work permit on their behalf. This is a developing area of legislation as Brexit approaches.
Ethical trading policies cover issues such as freedom of employees to choose their employer, working conditions, a living wage and other conditions that UK employees can mostly take for granted.
Equal opportunities policies protect men and women, ethnic groups, those with disabilities and other groups.
Grievance and harassment policies provide a safety value for employees so that they are not inadvertently mis-treated.
Whistle blowing ensures that if something isn’t right, or contrary to regulations or statutes then the employer is the first to know. Employees cannot simply go to the press because they do have an internal avenue if they feel something is not right and they are protected.
Avoid the boohoo, be a legitimate employer and pay the national minimum wage!
Malcolm Martin FCIPD
Author Human Resource Practice
Blogs are for general guidance and are not an authoritative statement of the law.