Minimum wage warning for businesses of all sizes…
A Bristol lawyer has warned companies large and small to be aware of an HMRC crackdown on businesses not paying staff the minimum wage, and says that the compensation those companies who do not adhere to the rules will have to pay, is not the most damaging consequence for the business.
Kevin Jones, partner and head of the national Employment and HR team at Clarke Willmott LLP, says although employers who have enforcement action taken against them by HMRC will have to cough up hefty fines and back pay for staff, it is the ‘name and shame’ tactic the authority is now using that will cause considerable long-term damage.
The warning comes following the highly-publicised Sports Direct case in which the retail giant admitted to not paying warehouse staff the national minimum wage. This week an agreement was reached between Sports Direct, HMRC and the union Unite which will see staff receive back pay totalling around £1 million.
The retailer and its employment agencies are also facing fines of up to £2m by the Department for Business, Energy and Industrial Strategy (BEIS).
Kevin Jones said: “The Sports Direct case is one that has received an awful of attention in the last few months and has escalated to the point that its owner Mike Ashley has been summoned to appear before Parliament to answer questions by MPs.
“While Sports Direct is a large chain retailer, it is important for all businesses, regardless of size or influence must take the rules surrounding minimum wage seriously.
HMRC are clearly putting more of a resource into enforcing this area of the law and they do not discriminate between whether you are a small start-up with a workforce of two, or a national powerhouse.
The naming and shaming culture now is the part which has hit Sports Direct the hardest. While the business may be in a position to pay fines and back pay awards, the negative publicity will be much harder to tackle and the directors have a long way to go to turn the reputation of the business around. Employers should also remember that since April there has also been a higher national living wage for those over 25.”
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