Implementation of the National Living Wage (NLW) has been made a focus by HMRC this year. HMRC has been given a directive to review Wyevale's processes including contracts and rotas.
In May, John Lewis Partnership (JLP) said it was in talks with HMRC after it emerged that it had been technically underpaying staff because of pay averaging. JLP announced that £36m has been set aside to cover potential back wage payments for the past six years. Debenhams and Carphone Warehouse have also had to deal with technical payroll issues this year.
The Government's NLW was introduced on 1 April 2016 for all working people aged 25 and over, and is set at £7.50 per hour. The current National Minimum Wage (NMW) for those under the age of 25 still applies. Differences in pay for ages and paying overtime and sick/holiday pay are all potential issues for companies that employ minimum-wage and flexible-working staff.
HMRC does not comment on individual businesses, but a spokesperson says: "HMRC enforces the NMW and NLW in line with the law and policy set out by the Department for Business, Energy & Industrial Strategy. The Government are determined that everyone who is entitled to the NMW receives it.
"We can’t provide specific advice on issues affecting garden retailers and the payment of NMW. However, common errors made by employers in paying NMW to workers can include:
- Not paying workers the correct NMW rate for their age'
- Not paying workers for all working time — including time spent training, travel time (in certain circumstances) and when workers are required to be available at or near a place of work for the purposes of working.
- Not keeping sufficient payroll and working time records to show they are paying workers at least NMW.
"All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff. HMRC takes action to ensure that workers receive what they are legally entitled to."
Other issues that can arise for retailers include pay with benefits in kind such as child care vouchers or uniform allowances which cause hourly rate to fall under the NLW rate, extra pay for NLW-salaried staff for attending pre-work meetings, security checks, and other extra hours worked above their contract.
Wyevale, which would not comment, has begun a key time working/right people, right place, right time initiative to help deal with peaks and troughs in trading.
Recommendations include a reduction in the number of 39-hour contracts, an increase in the number of 20-hour contracts and flexibility around working days/hours according to seasons.