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Author: S.Mars

National Minimum Wage ‘naming and shaming’

The government has published its latest ‘naming and shaming’ list of 200+ employers who have failed to pay at least the National Minimum Wage. Failing to pay NMW can have costly consequences, both financial and reputational. HMRC can issue fines of up to £20,000 per underpaid employee!

Calculating NMW isn’t just about hourly rates – here are some of the common pitfalls to avoid to make sure you don’t unintentionally underpay NMW.

Record keeping – don’t forget! Accurate NMW records are your best friend. You must keep them for three years, but civil claims can be brought up to five years after a breach, so you might want to go ‘belt and braces’ and keep them for a longer period.

Uniform if employees are required to buy clothing for their role, the cost must be deducted from their hourly pay when calculating whether NMW has been paid. Asking employees to wear their own clothing of a specific type or colour (such as black jeans and black shoes) can be considered as requiring employees to buy a ‘uniform’ and should be factored into NMW calculations (as was the case for Wagamama and TGI Fridays).

Clocking in and out I’ll often see systems where the time employees clock in or out is rounded, meaning time records are not accurately capturing all time actually worked. This can quite easily result in underpaying NMW.

Salaried employees – a more technical point, but no less important. If an employee’s salary is at or close to NMW, and their monthly wage is calculated based on 1/12th of their annual salary, you could find yourself underpaying NMW in the months with 31 days. Take advice to make sure that you can treat your employees as salaried workers (so that you can average hours and pay over a whole year) and avoid an unintentional underpayment of the NMW.

Contact me here if you’d like to discuss anything I’ve covered or if you need support carrying out a NMW audit for your business. 

This update is accurate on the date it was published, but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
Posted On: July 17th, 2023By |

Limiting non-compete clauses to three months

The government has announced their intention to introduce legislation that will limit the duration of non-compete clauses in employment contracts to just three months.

What does this mean for your existing non-compete clauses and post-termination restrictions (PTRs)? Here’s what you need to know:

Only non-compete clauses – the proposals will not affect your ability to use other PTRs (such as non-solicitation or non-poaching clauses), garden leave periods, or confidentiality provisions. It’s only going to be non-competes that are time-limited to three months.

Existing clauses – we don’t know if the three-month limit will apply retrospectively to non-competes in existing contracts (effectively cutting short any longer clauses by default), or whether the limit will only apply to contracts entered into after the legislation comes into force.

Restrictions in other documents – the announcement only refers to non-competes in “employment contracts”. We’ll need to wait for further detail on the legislation to know whether you’ll be able to use longer non-competes in other documents such as shareholder or settlement agreements.

Test for enforceability – irrespective of the proposed time limit, non-competes will still only be enforceable if they go no further than necessary to protect your legitimate business interests. They’ll still need careful drafting!

Timescales – legislation will be introduced “when parliamentary time allows”. We’ll update you when we know more and when the legislation will be introduced.

I always advise clients to review their PTRs annually. Your business and individuals’ roles change frequently so your PTRs need to keep pace. Get in touch to discuss how we can support you to ensure your PTRs keep up with business interests and remain enforceable. 

This update is accurate on the date it was published, but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
Posted On: June 15th, 2023By |

Employment contracts and the ‘3Cs’ – pt.1 | Compliance

It’s safe to say I’ve seen a few employment contracts in my time! A non-compliant employment contract can be expensive – a tribunal can award up to four weeks’ pay for each out-of-date contract you’re using.

Key areas of compliance for employment contracts were introduced in 1996 by the Employment Rights Acts…there’s no excuse for getting those elements wrong! More recently in 2020, the Good Work Plan added more red tape with further compliance requirements which employers have been slow to adopt. Here are the top five areas I’ll see regularly missing from employment contracts:

  • Any paid leave the employee benefits from (maternity or paternity leave, for example)
  • Details of all remuneration and benefits (such as enhanced maternity pay or private medical insurance)
  • Training requirements for the role, whether they’re mandatory, and who will pay for the training
  • Whether working hours are variable (or not as the case may be)
  • The correct statutory minimum notice employees are entitled to (one week for each complete year they’ve worked for you, up to a maximum of 12 weeks)

Reference to these areas needs to be included within the contract, even if they don’t apply. If there is no training requirement for example, you need to say as much.

Contact me here if you’d like me to support you with reviewing your employment contracts. A review can cost as little as £500+VAT and save you considerable expense and reputational damage if you’re relying on out-of-date contracts.

This update is accurate on the date it was published, but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
Posted On: May 4th, 2023By |