Evidence of the ramped-up efforts by HMRC to crackdown on underpayment of National Minimum Wage (NMW) were revealed this week. A record £15.6m underpayment was identified for more than 200,000 workers in the 2017/18 tax year, resulting in £14m of fines.
And the last round of companies named for underpaying staff showed hospitality businesses are still struggling in this area. 56 of the 239 companies listed in July (just over 23%) were from hospitality – the largest sector in the list.
As we’ve discussed before, this is really no surprise considering the complexity of hospitality payroll. To start with, staff are generally a mixture of part-time and full-time workers, and are likely paid on an hourly, weekly or monthly basis. You’ve then also got tips, service charges and shift swapping to contend with.
You also have to consider the uniforms your staff will wear and the time taken to change into them. You need accurate recording of shift start and end times, and to make sure that your records are properly maintained.
Used in the right way, technology can help remove the complexity of complying with NMW requirements, but it’s important to make sure that your hospitality payroll systems and processes are robust.
You need the right structures in place to ensure both you and your staff comply with all governing bodies, including HMRC and the Pension Regulator. You also need to make sure you have strong processes in place to ensure you’re paying your staff accurately and on-time, and that you have consistency in process management.
We recently worked with employment law specialists GQ|Littler to identify some of the potential pitfalls in NMW compliance for hospitality. You can find out more by watching our webinar recording, or by downloading our National Minimum Wage Guide.
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