How Not To Be Named and Shamed: Pay Your Employees The National Minimum Wage!

Year Published: 2015

Business Minister Nick Boles has announced today that 115 companies have failed to pay their workers the national minimum wage and they’ve now been named and shamed in a list published on the gov.uk website.

Retailer Monsoon Accessorize Ltd has topped the list for failing to pay £104,508 to 1,438 workers.

We understand Monsoon have explained the reason their wages fell below the national minimum wage was because it had a policy of requiring employees to wear Monsoon clothes on duty, after buying them at a discount. The compulsory expense meant in effect many employees were taking home less than the minimum wage. Since this list has been published the retailer has raised its wages.

It’s arguably surprising that Monsoon in particular, as a large national employer, has not been acting in accordance with proper legal advice in connection with such a fundamental employment right. All businesses, of whatever size, should however be in the know about how to calculate pay for national minimum wage purposes or risk legal action and/or financial penalties.

Employers need to be aware that many payments and benefits cannot be counted when determining whether or not an employee is being paid the national minimum wage. Examples of the benefits that cannot be counted include vouchers, reimbursement for work-related expenses, loan and wage advances and any benefit in kind (other than accommodation). If employers do offer these types of additional payments or benefits, we would urge them to seek advice to ensure they are paying staff at least the national minimum wage, after the appropriate deductions have been made from the calculation.

Employers also need to be aware that a compulsory National Living Wage is due to be introduced in April 2016 for all working people aged 25 and over. This will be set at £7.20 per hour. The current National Minimum Wage for those under the age of 25 will continue to apply.

For further advice or assistance regarding the National Minimum Wage or National Living Wage, please contact our Employment Law & HR team on 0161 475 7676.

You can view the other companies on the named and shamed list through the governments website.

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