Minimum wage non-compliance
Minimum wage non-compliance is often inadvertent, but with 'naming and shaming' of those who breach the National Minimum Wage (NMW) being introduced by the government's Business Innovation and Skills Department (BIS) last October minimum wage non-compliance can have a huge negative impact on your organisation's reputation.
By Metis HR.If your organisation has pay levels close to the NMW, complicated pay structures or you use zero-hours contracts you may inadvertently at risk of minimum wage non-compliance.
- Some of the most common ways that employers find that they have minimum wage non-compliance are not realising that travel time between each place of work may count as working time
- expecting staff to attend training or team meetings just before or just after their paid shift starts
- deducting the cost of uniforms, training or meals without realising that NMW is calculated after making those deductions
- not realising that enhanced rates e.g. for weekend work are disregarded when calculating NMW. NMW is calculated on basic pay rates
- overnight working where staff are sleeping eg in the care sector and staff are only paid for the hours that they are awake and providing care. The time when the care worker is asleep should be paid at NMW
- keep accurate and comprehensive records of pay, shifts worked and travel time
- review for yourself where your vulnerabilities may lie
- if you find that you have made errors in paying employees put a schedule of repayments in place
- re-assess the profitability of your organisation once you have reviewed for minimum wage non-compliance and whether and how you might pass on your increased costs
