With the National Minimum Wage (NMW) rates increasing in April, it’s never a better time to have a spring clean of your records and for us to remind employers about some key issues they will want to bear in mind concerning record keeping. 

We regularly advise employers on the complexities of complying with NMW legislation. It is easy for employers to commit inadvertent breaches. Especially in the health and social care sector, where the issue of commissioners failing to fund care sufficiently leads to low wages and a very small buffer zone between the NMW rates and the actual rate of pay - with large care providers recently being named and shamed for failing to pay NMW.  

Records of pay and hours are crucial to defending an allegation that NMW has not been paid, whether that is by HMRC or via an employment tribunal claim. Not only are they vital to defending your processes and figures, but it is also a legal requirement to keep records of the hours worked and the payments made to workers. Indeed, it will be presumed that a worker has not been paid the NMW unless the employer can prove to the contrary. There are also criminal offences associated with failure to maintain records and falsification of records. 

Records must be kept for at least six years. Hopefully, the above will just be a useful reminder of what you already know. What many employers may not be familiar with is that workers have a legal right to request access to those records.

According to Section 10 of the National Minimum Wage Act 1998, if a worker has reasonable grounds to believe that they are, might be, have been, or may be paid less than the NMW, they have the right to request their employer to produce their pay records. The employer must permit the worker to inspect and keep these records.

Importantly, if such a request is not complied with within the tight deadline of 14 days, the worker can present a claim. The compensation for a successful claim is 80 times the applicable NMW rate at the date that the tribunal makes its decision. Using the incoming NMW rates, this could result in an award of up to £915.20 for each request that is not properly complied with. 

There is no minimum service requirement, and an individual does not need to be a current worker/employee to make such a request. Indeed, such a claim does not need to accompany a claim for unlawful deduction from wages/underpayment of NMW. 

A Data Subject Access Request (DSAR) is much more likely to come across your desk as awareness of this data protection right is much higher in the general public. It is however vital that the two different types of requests are not confused. Employers have at least one month to respond to a DSAR (with the possibility of an extension) and some level of discretion as to what level of disclosure is provided. Whereas, with a request under Section 10, employers have only 14 days to provide the access, unless you can show that the worker agreed to an extension.

It may be hard to make the distinction. A worker requesting a DSAR will likely say something like “I want all personal data that the company holds relating to me”. Whereas a Section 10 request is more likely to mention records relating to pay, concerns about not being paid the NMW, the words ‘production notice’ and may even include a direct reference to Section 10. 

In summary, here are my top tips for anticipating and dealing with Section 10 requests:

1. Ensure that the way that your organisation pays your hourly-paid and live-in care staff is transparent and easy to understand for all. This is likely the best way to reduce the likelihood of these types of requests (and challenges or grievances generally on the topic of NMW compliance). 
2. Ensure that your system keeps the data relating to hours worked and wages paid in every pay reference period for at least six years and that the raw data can be easily accessed.
3. On receipt of a Section 10 request, act promptly to acknowledge and request an extended deadline to produce the records. Even if you can obtain the data requested within the deadline, we advise seeking some extra wriggle room, so that you can review the data, think about how best to present/explain the data to the worker and anticipate any follow-up queries/challenges you may receive.
4. Comply within the deadline, whether 14 days or as extended.

If you would like any further advice on NMW compliance, please don’t hesitate to contact me.