NMW campaign – a chance for employers in the hair & beauty sector to ensure they comply with the law
HMRC have just launched a campaign in July 2015 to encourage employers in the hair and beauty sector to ensure that they are complying with National Minimum Wage (NMW) legislation.
HMRC will start to contact employers in early 2016 – it is therefore best for employers to take action now to check they are compliant, before HMRC become involved.
The campaign, called the ‘National Minimum Wage campaign’, is aimed at employers who have not paid correctly in line with NMW legislation. Initially, HMRC will be targeting the hair and beauty sector. The campaign offers an opportunity, for about six months, to employers to check they are paying the NMW correctly and if necessary, put things right voluntarily. In addition, HMRC are offering employees the chance to check their own pay and register a complaint if they find any problems.
HMRC are using the campaign to provide tools and information to employers and employees – employers should check they have paid the right amount and employees will be able to check they have received the correct pay.
If an employer has not been complying with NMW legislation, they will have the chance to put matters right. Using the campaign will mean an employer will not be subject to penalties and publicity, even though they had not paid the correct NMW originally. If, following the campaign, HMRC investigate an employer and find that they are not paying the correct NMW, the employer will be subject to penalties and publicity via ‘naming and shaming’. The penalties for NMW non-compliance can be up to £20,000 per employee paid incorrectly.
What do I do to comply?
Employers should use the information and tools provided by HMRC to check that they are compliant with NMW legislation. There is information available online and employers can also contact the Advisory and Conciliatory Service (ACAS).
If an employer carries out a check and finds that they have not complied, they should tell HMRC, using a notification form and put this right, by paying the employee(s) what is owed. The employer should also change their system for calculating NMW, so that they do not make the same mistake in the future.
Completion of a notification form ensures HMRC are aware that the employer is taking action to correct errors and will prevent HMRC from taking enforcement action.
Following notification, an employer has up to two months to put things right. They should tell HMRC, using a disclosure form, what they have done.
What if I do not comply?
HMRC have indicated that if an employer uses the campaign and rectifies any underpayments, there will be no penalty and the employer will not be subject to publicity via ‘naming and shaming’.
The penalties for NMW non-compliance changed in 2014, becoming significantly more severe. Penalties can now be as much as £20,000 per employee paid incorrectly. In addition, employers who fail to comply will be subject to publicity via ‘naming and shaming’, regardless of the number of NMW failures and the degree of non-compliance.
HMRC will take follow-up action in the hair and beauty sector in early 2016. They will make use of new data analysis and intelligence to identify businesses at risk of non-compliance.
What if I am an employee?
If you find that you have not received the correct pay, HMRC are encouraging you to approach your employer in the first instance; if the employer will not resolve the underpayment voluntarily, you should then report this to HMRC, who will fast track your employer for investigation.
If you do not feel comfortable approaching your employer direct, we suggest that you simply approach HMRC and advise that you do not think your employer is complying with NMW legislation.