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Updates from the Clayton & Brewill team.

H&M hits the headlines for national minimum wage failings

20th January, 2015

Fashion chain H&M was one of a number of employers in the news last week (15 January) for all the wrong reasons, when it was fined for failing to pay the national minimum wage, explains Clayton & Brewill’s payroll specialist Chloe Hughes.

H&M was on a list of 37 companies released by HMRC, each of which was fined for non-compliance and ordered to retrospectively repay each worker to bring their earnings up to the correct level.

Chloe Hughes payroll and pension auto-enrolment specialist at Clayton & Brewill

Chloe Hughes, Head of Payroll Services

Statistics from the Low Pay Commission show that since 2010 there has been a 52 percent rise in young workers being paid less than the national minimum wage.

The National Minimum Wage rates went up in October 2014 – click here for the latest rates. Remember too that if you are in a tips-based business such as a hair salon or a restaurant, you can't use tips to count towards an employee's NMW.

Whilst there was some comment about the low level of the fine given out by HMRC (reported to be just £1,400), perhaps more damaging is the extensive negative publicity the business has received as the highest profile offender on the list.

Meanwhile, the government plans to increase fines to up to £20,000 and has given HMRC's enforcement team a fighting fund of £12.2 million to help identify other businesses that are failing to pay the NMW.

Our message?

Payroll mistakes with national minimum wage workers can be expensive, both financially and reputationally.

H&M blamed a time logging error for the underpayments made to 540 of its 9500 staff – but the excuse didn't wash with HMRC.

Clayton & Brewill can handle your payroll, making sure you are compliant and that your people are paid on time, leaving you free to concentrate on your business. Call my colleague Julie Braithwaite or me, Chloe Hughes, on 0115 950 3044 for a friendly and confidential conversation about your potential requirements.

Found this blog post useful? You might also want to read:

Proposals to simplify auto-enrolment are welcomed

Getting to grips with the new workplace pension rules

Overtime to be included in holiday pay

Clayton & Brewill are chartered accountants with offices in Nottingham city centre, Melton Mowbray and Long Eaton. Clayton & Brewill’s specialist payroll team works with owner managed businesses and small to mid-sized employers.

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