We are delighted to announce that our private wealth law department has continued to maintain its Band 2 position in the latest edition of Chambers and Partners High Net Worth.
HMRC confirm that its enforcement policy aims to:
- prevent employers gaining a competitive advantage over other businesses by unlawfully depressing workers’ pay;
- encourage employers to voluntarily comply, so that workers are paid the correct wages;
- protect vulnerable workers by penalising employers who fail to pay the national minimum wage on time;
- ensure workers who are paid correctly to receive arrears which take into account the length of time they have been underpaid;
- demonstrate to the business community that non-compliance with national minimum wage legislation is unacceptable.
As part of its power to achieve the above policy aims, where HMRC find any non-compliance with the National Minimum Wage legislation, it will issue a notice of underpayment which must always include a penalty. The penalty, for pay reference periods which start on or after 1 April 2016, is double the total underpayment (i.e. 200%) for all workers shown on the notice of underpayment. The maximum penalty per worker is £20,000.
HMRC assistance with compliance
We are aware that HMRC are currently offering assistance to help employers check whether workers are paid at least the National Minimum Wage, and correct any practices which employers may have which lead to the National Minimum Wage non-compliance (such as sleep-in arrangements, provision of accommodation, non-payment of business related travel time and travel expenses). This assistance is provided with the view to encourage employers to comply with the National Minimum Wage legislation.
We understand that employers who review their practices with the assistance from HMRC, will not be subject to the usual penalties, should HMRC find that there has been a failure to pay the National Minimum Wage. In line with its enforcement policy aims, we expect that where as part of this review employers are found to have underpaid their workers, they would be expected to correct any historic underpayment (up to 6 years).
To date employers subject to formal National Minimum Wage inspections had some protection in relation to penalty notices being issued by HMRC, in that the approach taken, limited the penalty to £20,000 per underpaid worker. However, a recent Tribunal decision has now confirmed that whilst there is a statutory cap of £20,000 per underpaid worker for each penalty notice, there is no limit on the number of penalty notices HMRC can issue in respect of each worker, as long as they are for different periods. This means employers can face multiple fines; making the statutory cap of £20,000 per unpaid worker almost meaningless.
Employers could therefore find themselves not only paying workers the arrears of National Minimum Wage but also paying HMRC a significant and uncapped amount under penalty notices.
On 26 July 2017 the Government announced it has temporarily suspended enforcement activity and is waiving historic financial penalties against employers in respect of sleep-in shift. Please see our previous briefing here.
For more information
For more information on the National Minimum Wage compliance, please get in touch with your usual contact in our Employment Team or speak to Anna Dabek or Matthew Wort. You can find out more about our employment work on our website.
Charities, like other organisations, may be subject to or choose to voluntarily comply with the reporting requirements under the Modern Slavery Act 2015.
The draft regulations making it mandatory for anyone entering a registered care home in England to have been double vaccinated unless they are clinically exempt were made on 22 July 2021.
In the Transforming Public Procurement Green Paper, the Government signalled its desire to increase its control over procurements by all contracting authorities.
The monthly round-up from the Anthony Collins Solicitors charities team.
Legal updates as the UK enters into stage 4 of the roadmap and legal restrictions on face coverings and social distancing are lifted.
The first disability we are going to discuss is diabetes. We begin by discussing the different types of diabetes; their similarities and differences and how we live with the disability within our day.
Tim Coolican and Freya Cassia explore the legal and practical options available to providers if a disappointing result is received following an inspection.
Following the launch of the CQC’s new strategy for how it regulates health and social care, many providers will be keen to know more about how the changes might affect them in the future.
EPC’s are not required to be served with a Section 21 notice for assured shorthold tenancies if the tenancy predates October 2015.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.