Staff uniforms: National Minimum Wage could be infringed16 May 2018
In 2015, the clothes retailer Monsoon was ordered to pay more than £100,000 to its employees as a result of underpayment of the National Minimum Wage (NMW). The underpayment resulted from its practice of requiring staff to wear Monsoon clothes at work, and deducting the discounted cost of such clothes from their wages. This resulted in certain employees receiving less than the minimum wage.
However following a government announcement this spring, what is considered as an employee uniform appears to be much more widely defined than some may have envisaged, something companies such as Wagamama, Marriott Hotels and TGI Fridays have recently found out.
Around 9,200 workers will receive a total of £1.1m after their employers broke minimum wage laws, according to the Department for Business, Energy and Industrial Strategy. Wagamama in particular were adjudged to have failed to pay £133,212 to 2,630 staff. They had asked that front-of-house staff wear black jeans or a black skirt with their Wagamama branded top. This was considered as asking them to buy a form of uniform, so employees should have been paid for it.
This reiterates that even loose policies, such as requiring employees to wear white t-shirts and black trousers for work, could require the payment of a supplement. HRMC offers the following examples:
1. An employer requires the workers to wear a tee shirt with the shop’s logo which are purchased from the employer. The purchase, either by payment to the employer or deduction from the worker’s pay, will reduce national minimum wage pay.
2. If the worker freely chooses to purchase an additional branded tee shirt from the employer, this is NOT then a requirement of the job. So, a payment for the item would not reduce national minimum wage pay.
3. An employer requires workers to wear a uniform consisting of any black trousers and any white tee shirt. Workers can purchase these from any shop. The cost of purchasing these items will reduce national minimum wage pay, since it is a specific requirement imposed on the worker by the employer.
Employers who fail to pay the NMW will be required to repay any underpayment to the worker(s) and may also be ordered to pay a penalty to the Secretary of State of 200% of the underpayment, subject to a maximum penalty of £20,000 per worker. The employer may also be listed under the government’s naming and shaming reporting scheme which could result in brand and reputational damage.
With the government launching an awareness campaign for the new minimum wage rates and HMRC allowed to carry put on-site inspections of an employer’s records at any time, even without an employee bringing a claim, employers may feel the need to review their policies on dress code to avoid being named and shamed and liable to substantial fines and repayments.
If you require any further information, please contact us.