HMRC names and shames companies over national living or minimum wage

Here’s why it pays to play – and pay – fair. HMRC has demonstrated once again that it takes no prisoners when it comes to paying the national minimum wage.

Last month saw another round of ‘naming and shaming’, with almost 240 organisations on the hit list for failing to pay their workers the national living or minimum wage.

Some household names were among the guilty parties, including fast food monoliths KFC and Pizza Hut, cinema chains such as the Odeon Group, sports clubs like Bristol City FC, and various cricket and rugby clubs. Also in the firing line were care homes, hairdressers and pubs.

In numerical terms, this wide-spread failing translates into over 22,000 employees being short-changed over several years to the tune of £1.4m.

Small wonder then that the Government is insisting they be paid pack at current minimum wage rates, with collective fines for employers hitting the £2m mark. Was it really worth trying to dodge the bullet?

‘If you’re a smaller business, this is one of the key areas of legislation you need to get right,’ said Cathy Monaghan, Head of HR at PES. ‘Not only is underpaying workers clearly unfair, it causes reputational damage and could lead to hefty fines.’

Could you get it wrong by mistake?

But what if you find yourself named and shamed without knowing why? Even if you’re confident that you don’t pay below the minimum for your staff, beware – HMRC may have a different way to you of calculating your per hour rates.

For example, not paying travel time or underpaying apprentices could count against you. HMRC may even disregard the hourly rate you pay and calculate a lower ‘hourly’ rate if, for example, you pay everyone as ‘salaried’. In this case, they will look at one week’s pay divided by hours worked that week – and in months with 31 days this can skew the rate for that week.

The Government shows no signs of letting up on its crusade to eradicate underpayment. July saw the second ‘bust’ of the year, following on from a similar outing of nearly 180 companies back in March. So make sure you’re playing by the revenue’s rules.

‘Of course we want to be sure that no smaller business unwittingly falls foul of pay legislation,’ continued Cathy. ‘Some organisations don’t have a clear idea of what could affect their pay rate. Also, fair pay and reward are part of creating a positive employee experience, another reason why it’s so important to examine your pay policy.’

If you’d like to know more about this issue, please get in touch.

For support with any of your people-related dilemmas, please contact our refreshingly different HR advisers.

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