Employers fall foul of NMW laws over uniform requirements

The government regularly “names and shames” employers who breach national minimum wage laws by publishing a list of those who have been fined. The latest list reveals that restaurant chains Wagamama and TGI Fridays and Marriott Hotels have each been fined for failing to pay staff properly.

No employer wants the negative publicity which appearing on the government’s list brings. While the practice of naming and shaming is intended to embarrass unscrupulous employers into compliance, it is often simply innocent mistakes which lead to technical breaches of the law. Regardless of the motive for failing to pay the NMW, employers will be pursued by HMRC who have sweeping powers to investigate and punish non-compliance.

It is clear from the latest list of companies found to be breaking the law that the rules on staff uniforms are particularly misunderstood by employers, even the very large ones which have access to the best legal advice!

Wagamama blamed “an inadvertent misunderstanding” of the rules on staff uniforms for its blunder. The company said it had asked front-of-house staff to wear black jeans or a black skirt with their Wagamama-branded top. This was considered as asking them to buy a form of uniform, “and so we should have paid them for it,” it said. Wagamama has repaid an average of £50 to 2,630 employees, updated its uniform policy and now pays a uniform supplement to cover the black jeans.

Comment

The various rates of the NMW are set to increase again from 1 April 2018. However, for employers, it is not as simple as just making sure they are paying the appropriate hourly rate to workers (and that they know when to increase this when staff have a birthday and move from one age band to another). There are complex rules around what does and doesn’t count as pay for the purposes of the national minimum wage, what hours are chargeable and how accommodation and other work related items are charged.

HMRC has a calculator on its website which can help you to check if you are receiving the correct pay.

Uniforms seem to be particularly problematic in the hospitality and retail sectors. Any requirement for workers to purchase their work clothes (even at a discount) from their employer will be considered a deduction from wages which will reduce the average rate of pay. In addition, where workers are required simply to wear say, black trousers (as in Wagamama’s case) or, a plain white shirt, a nominal value will be assigned and this will be deducted from wages received. If this deduction results in the rate of pay falling below the applicable NMW rate then the employer will be in breach.

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