Jeni Morris explains how organisations can guard against breaking the National Minimum Wage laws.
HMRC enforce National Minimum Wage laws; however, many businesses and professional advisors are often surprised by not only the depth of the technical complexities but also the length of time an investigation can take to conclude.
NMW is not just a rate, it is actually a whole calculation. Only three elements are required to perform a NMW check – pay, deductions and time worked. However, the requirements and frequency of each calculation will vary depending on which type of worker contract and worker category each individual.
A correct NMW check requires fully understanding what should be included in each of the pay, deductions and time worked elements. Errors involving what should be included as working time are frequently found during a NMW investigation. Some employers do not monitor the actual working hours of their employees, choosing to use the employee’s contracted working hours in their NMW checks. Unfortunately, if the employee is completing additional working time this will also need to be factored into the NMW checks and calculations.
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