This morning’s news will not have made good reading for retailer Monsoon Accessorize, as they top the latest “name and shame” list of employers who have failed to pay their workers the national minimum wage.

According to the Department for Business, Innovation and Skills (BIS) website, the latest list of offending companies totals 115, owing to a total of over £389,000. 400 employers have now been named and shamed since the introduction of the scheme in 2013, although the TUC estimates only a quarter of employers are actually getting caught.

Monsoon Accessorize’s Minimum Wage Shortcomings

Monsoon failed to pay £104,508 to 1,438 workers, so an average of around £73 per worker.  However, perhaps even more eye-catching is the employer in second place on the list who failed to pay a total of £27,151.79 to just 6 workers, averaging out at £4,525 per worker. When we talk about the national minimum wage, such figures can be truly life-changing.

Monsoon is quoted as saying that the failure to meet minimum wage requirements was because the company had offered staff discount on clothes to wear at work and had then deducted the cost from wages.  They have also implemented changes to ensure there is no repeat.  Employers can easily fall foul of the regulations when it comes to deducting other “benefits in kind” such as certain accommodation costs, so is it a bit harsh for BIS to name and shame so readily?

Criteria for ‘Naming and Shaming’ by BIS

A look at the BIS website sheds some light on the circumstances in which companies may incur the wrath of the enforcers (HMRC). Examples include where:

  • there is evidence that the employer knowingly or deliberately failed to comply with their NMW obligations;
  • there is evidence that the employer has previously received advice from HMRC about the steps they need to take to ensure future compliance with national minimum wage and has not taken those steps;
  • there is evidence that the employer has failed to take adequate steps to keep or preserve NMW records;
  • there is evidence that the employer has delayed or obstructed an NMW compliance officer in the performance of their duties;
  • there is evidence that the employer has refused or neglected to provide information or produce documents to an NMW compliance officer;
  • there is evidence that the employer refused or neglected to pay arrears of the NMW to workers, following HMRC intervention;

Transition from National Minimum Wage to National Living Wage

The national minimum wage is soon to be replaced by the national living wage, which, according to government figures, will mean a rise of £900 per year for those currently working full-time on the national minimum wage. Even those companies who are currently complying will need to ensure continued compliance from 1 April 2016.

In the meantime, Monsoon Accessorise will probably be in the process of recruiting for the busy Christmas period and will be hoping that the current storm is remembered as more of a teacup moment.

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