The Low Pay Commission has published a report on compliance and enforcement of the National Minimum Wage. The report indicates that the Covid-19 pandemic has left workers on low salaries vulnerable and UK businesses under even greater pressure than before. The report suggests that as a result, the risk of NMW underpayment has increased.
My experience, from advising many social care and housing providers on NMW issues, is that compliance with NMW has been a challenge for several years now. Although most employers are aware of the NMW rates and largely committed to rewarding staff appropriately, NMW regulations are a little like the iceberg that sunk the Titanic. We are increasingly finding that it is what lies beneath the headline payment figure which often sinks them when it comes to HMRC inspections.
Now, more than ever, I would therefore encourage all businesses to review your current approach and pay practices, most notably regards to record-keeping, allowances and top-ups, travel time, training, on-call arrangements, uniforms policy, salary sacrifice and deductions ready for the next possible HMRC inspection. My colleague, Faye Rush, has written an article that may initially help to guide you through some of the most challenging areas of any such NMW self-review - National Minimum Wage Myths Busted
The evidence we have heard, from workers and employers alike over the past year, leaves little doubt about the strains placed on low-paying sectors by the pandemic and the increasing risk of non-compliance.