{"id":965,"date":"2018-05-01T16:18:15","date_gmt":"2018-05-01T15:18:15","guid":{"rendered":"http:\/\/www.withcreative.co.uk\/dev\/companies-fall-foul-of-nonsense-rules-in-minimum-pay-wrangles\/"},"modified":"2021-01-15T00:15:55","modified_gmt":"2021-01-15T00:15:55","slug":"companies-fall-foul-of-nonsense-rules-in-minimum-pay-wrangles","status":"publish","type":"post","link":"https:\/\/dev.withcreative.co.uk\/langricks\/companies-fall-foul-of-nonsense-rules-in-minimum-pay-wrangles\/","title":{"rendered":"COMPANIES FALL FOUL OF NONSENSE RULES IN MINIMUM PAY WRANGLES"},"content":{"rendered":"

Chris Langrick FCA,\u00a0 Director at Langricks Chartered Accountants & Business Advisers, says recent naming and shaming of big companies for technicalities around how minimum wage is applied is a tough gig for the leisure sector.<\/em><\/p>\n

You may have read in the media<\/a> over recent weeks about some large companies, particularly in the leisure sector, being fined for failing to pay the minimum wage.<\/p>\n

Wagamamas had to repay on average \u00a350 each to 2,630 staff.\u00a0 The hotel chain Marriott has also been fined as it had underpaid 279 of its staff around \u00a3250 on average.<\/p>\n

The media reports that these companies are \u201cfailing to pay minimum wage\u201d or \u201cnamed and shamed for paying below minimum wage\u201d.<\/p>\n

Do we really think that Wagamamas and Marriott would risk their good names by deliberately avoiding the national minimum wage or have they simply being caught out on technicalities?<\/p>\n

When you dig a little deeper into the circumstances of their misdemeanours it\u2019s clear that the latter has prevailed.<\/p>\n

Wagamamas was foxed by an interpretation of how the minimum wage regulations apply to uniforms.\u00a0 Where staff are on the minimum wage and required to wear certain clothes for work, such as black jeans, an allowance needs to be made. \u00a0Fine.<\/p>\n

However a professional employee wearing a suit cannot claim any such deduction.\u00a0 The argument is made that apparently a suit can also be worn for personal reasons, but black jeans cannot. This is clearly a mistake waiting to happen for any business.<\/p>\n

The rules governing what employees are entitled to are so complex and open to misinterpretation \u2013 it\u2019s no surprise that companies, even with \u2018armies of HR and legal personnel\u2019 as the media put it \u2013 might on occasion fall foul of the regulations.<\/p>\n

What has amazed me is in the overall scheme of things and the scale of the payrolls these companies are running, these are relatively small amounts to chase for HMRC.<\/p>\n

Not that I don\u2019t believe in fairness of pay \u2013 it just seems ridiculous that while all this is going on there seems to be little progress with curtailing the well-documented tax avoidance strategies of big business like Starbucks and others.<\/p>\n

Starbucks isn\u2019t doing anything illegal of course. They are simply drawing down on the size and scale of operations and the level of tax expertise at their disposal both in-house and via external consultancy services.<\/p>\n

But it does not make it a level playing field for the independent coffee shop owner down the road, who has no such legions of support and will be paying standard rates of UK tax whether he likes it or not.<\/p>\n

One of the ways proposed around the problem is to link tax to turnover \u2013 a kind of \u2018turnover tax\u2019\u00a0 but this would never work \u2013 there always needs to be a reference to profit.<\/p>\n

I am all for employees having appropriate pay in their pockets, but it is clear that while the rules may have prevailed, common sense has certainly not.<\/p>\n

Rather than naming and shaming companies trying to work out what\u2019s a tax benefit and what\u2019s not, we would all be much be better focused on challenging the rules in the first place.<\/p>\n