The government’s scheme of naming and shaming employers who fail to pay National Minimum Wage or National Living Wage is to resume following a review of the scheme.
The changes will see naming rounds occur more often, but the threshold has been increased from £100 to £500 – and businesses that underpay by less than £100 will have the chance to correct their mistakes without being named.
Employers offering salary sacrifice and deduction schemes will no longer be subject to penalties if the scheme brings payment below the National Minimum Wage rate. However, deductions for uniform and other items connected with the worker’s employment will continue to be penalised.
The government is also widening the range of pay arrangements available to businesses employing ‘salaried hours workers’, so that those employing workers who are paid hourly or per day are less likely to be caught out due to differences in employees' hours from one month to the next.
These changes are expected to come into force on 6 April 2020, subject to normal Parliamentary approvals.
UKHospitality has welcomed the proposed revamp, but the trade association has also highlighted the continued potential for administrative errors and called on the government to work with businesses and to produce sector-specific guidance to help employers understand their obligations and prepare for any changes.
UKHospitality chief executive Kate Nicholls said: “There is no excuse for deliberately paying staff below the National Minimum Wage. It is a legal requirement and it is good to see the government cracking down on rogue employers and highlighting the point that non-compliance is not acceptable.
“The proposals around the definition of salaried workers will help to reduce inadvertent errors by recognising the different ways in which people like to get paid in the 21st century. We look forward to working with government and employee representatives to make sure these new rules work for everyone.
“We believe more needs to be done to totally rule out administrative errors, though. Some businesses have been caught out by admin errors in the past, rather than through deliberate underpayment. We have made this point clear to the government previously and highlighted the potential for employers to make honest mistakes on issues like accommodation offset or staff uniforms. The focus should be on tackling those businesses who knowingly underpay.
“Sector-specific guidance which incorporates the various nuances and needs of vastly different businesses would help clear up any misunderstanding and help employers understand their obligations and prepare for the changes. We hope the government will work with the hospitality industry to promote compliance.”