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HMRC are taking a tough stance on minimum wage breaches

HM Revenue and Customs are currently very active in investigating businesses who they feel are breaching the national minimum wage and national living wage legislation. The number of HMRC investigations opened up into Employers, over potential breaches, increased by 43% from 2775 in 2016/17 to 3975 in 2017/18 and this is set to continue.

The increase in these rates is a worrying trend and so it is important that Employers review their systems to ensure they are not underpaying their Employees. In addition to enforcing back payments to affected Employees, HMRC also have the ability to impose substantial fines (double the amount of any underpayment) where breaches are discovered and more importantly, they name and shame offending businesses.

There are some instances where Employers can be caught out and be found to be eroding minimum wage; for example, making deductions which are not either statutory or contractual may be unlawful. Travel between assignments during the working day counts as working time and should therefore be paid.

Iceland Foods have recently fallen foul of the regulations as a result of a voluntary Christmas Saving Scheme which was deemed to be a violation – even though savings set aside were kept in a ring-fenced account and could be withdrawn by the Employee at any time. Branded as ‘just madness’ by Iceland’s Chief Exec!

Also, enforcing ‘uniform’ stipulations, even where not branded, has seen companies like Wagamama rethink and pay staff a ‘supplement’ to cover black jeans.

If you are unsure about this please feel free to contact our HR Consultancy Team on 01302 341 344.

By Angela Stancer ACIIHR Manager

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