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National Minimum Wage Compliance: the challenges and how to solve them

National Minimum Wage Compliance: the challenges and how to solve them

By Raoul Parekh - 28 February 2018

Paying the national minimum wage (“NWM”) seems easy: just make sure you set hourly rates at or above the legal minimums. But as many businesses have found, it’s just not that simple. From different rates for different ages of worker to surprising rules about what counts as working time, this area of law contains several traps for the unwary employer.

As if that wasn’t enough, it’s not just being sued by employees that you have to worry about: businesses face the additional risk of Government enforcement. HMRC has been tasked with fighting for workers’ rights in this area and has been flexing its enforcement powers in recent years. Since October 2013,1,584 businesses have been named and shamed for failing to comply including several household names.

Being fined for failing to pay the national minimum wage and ordered to pay arrears is not a good look for anyone. GQ|Littler’s Richard Harvey and Raoul Parekh are speaking at a joint event on 6 March 2018 with hospitality cost control solutions provider Fourth about some of the challenges facing the hospitality sector, and how technology can help ease the burden. You can register for the event here, or if you can’t attend the event, we’re also co-hosting a webinar on the same topic the following day.

Below we highlight some of areas that the hospitality sector has found particularly challenging – we’ll be answering many of these questions at our event, so come along if this is of interest to you.

1.     Tip me baby, one more time

Do tips and service charges count as pay for the purposes of the NMW, and does a tronc help?

2.     Dress codes can mean wage woes…

What changes do you need to make to payroll systems if you require your staff to wear a uniform? What if it’s just a “black jeans and white top” dress code?

3.     A change is as good as a rest. But is  it working time?

Do you have to pay your staff for time before shift changing into a uniform? What constitutes ‘working time’?

4.     What’s past is prologue – so make sure you keep hold of it

What records do you need to keep and for how long, and what happens if you don’t?

5.     Travel time: does it count?

When is travel time working time, and how can you track it?

6.     Honey, I underpaid the kids

Why should you worry about when your employees celebrate certain birthdays – and how can you keep track?

7.     …And all the rest

There’s a whole host of routine NMW issues that come up every day that can prove a challenge for the hospitality sector, including:

-          How a pay reference period is defined.

-          Keep up with changes to the NMW and other regulatory changes.

-          Rounding work time up or down.

-          Trial shifts.

-          Providing living accommodation to workers.

Used in the right way, technology can help remove the complexity of complying with NMW requirements. Register for our ‘National Minimum Wage: Challenges and how to address them’ event or webinar to find out more about these challenges, the legal requirements and how technology can ease the burden of compliance.