Last year over 26,000 workers have received, between them, some £4M in back pay as a result of HMRC orders. Some 708 employers have been fined. You will not, of course, be next – but are you sure? There are a few simple checks you can make:
Whom do you employ?
In the first place, all employees are covered, but don’t overlook casual workers and home workers. If you have agency staff or contractors who employ others to carry out your work you could also finish “picking up the tab.” Volunteers and interns could be entitled to the National Minimum Wage (NMW) if their employment status is uncertain. Some employers have been caught out.
What do you pay them?
NMW wage is based on gross pay for normal work. You cannot lump in on-call allowances, overtime premium payments, or tips as part of the average pay for the pay period. And if you make deductions for required clothing this reduces the gross amount for NMW purposes – as some retailers have discovered.
What hours count?
Because the NMW is based on an average of pay over hours worked, what counts as paid time is equally important. If employees are “at your behest” then that time counts towards the average whether it is paid or not. Travel time may count, on-call time (in certain circumstances) ,sleep over time (in some circumstances) and even expected early starts or late finishes might all be part of working time. At least one employer was hauled in on account of by extended hours in the recent HMRC trawl.
We cannot include very detail in a short blog; these are the main points. If you would like a second opinion on whether you comply with the NMW we’d be happy to help.