The Government’s approach has two high-profile ‘fronts’. Firstly, enforcing the national living wage for all employees by bringing tribunal cases against employers. By Philip Richardson, Head of Employment Law at the national law firm, Stephensons.
Where employers are found to have breached the minimum wage law, they have to pay the money owed to employees and can also be required to pay a penalty to the Secretary of State amounting to 200 per cent of the money owed, up to £20,000. Furthermore, company directors can be criminally prosecuted for failure to pay the national living wage and disqualified for up to 15 years.
Secondly – as evidenced by the most recent investigation – the Government is taking greater steps to identify employers who are failing to pay for all working time, including any and all activity and expenses relating to the working day, including briefings, inspections, overtime hours and illegal deductions for uniform and equipment.
The embarrassment and loss of reputation suffered by companies who are exposed by investigation not only dissuades those companies from similar behaviour in future, but sends a clear warning to other companies that such practices will be found out and penalised.
Given the financial penalties and the public relations victories the Government has secured so far, I see no reason why they would look to change this winning formula any time soon.
While companies like Argos, Debenhams and Sports Direct will of course grab the majority of the headlines, hairdressers and hospitality businesses were among some of the most prolific offenders, showing that small and medium sized businesses should also be on their guard.
While national retailers cannot hide behind the excuse of ignorance – each have more than enough resource to understand meet their legal obligations – smaller companies might, rightly or wrongly, be unaware that such practices are against the law.
As such, it is imperative that all businesses take the time to look carefully at what they class as working time. If this does not match the legal criteria, steps should be taken to remedy this as quickly as possible and to make sure that staff are fully reimbursed. “Failure to do so could mean that it is their business which is next to be named and shamed.”
