How many weeks are there in a year?
Most people would say that there are 52 weeks in a calendar year – but for payroll purposes that is not the correct answer and it seems it cost Debenhams £63,000 for getting that wrong.
Debenhams was one of the high profile companies recently named and shamed as part of the Government’s campaign to ensure that all employers meet their National Minimum Wage obligations. The last list published included 350 companies such as clothing store Peacocks, Lloyds Pharmacy and a number of Subway franchises. Debenhams blamed its failure to comply (underpaying approximately 12,000 employees by an average of £10 per employee over the year) on an error in its payroll software. It had worked on the assumption that there were 52 weeks in a year, not 52.17 as specified by HMRC to account for the fact that 365 days amounts to slightly more than 52 weeks.
Other employers in the hospitality business made the mistake of using tips to top up pay, asking staff to pay for their uniforms or removing accommodation deposits from salaries. Some employers also did not pay staff for time spent in meetings “unpaid” before they started work. Clearly if you have someone being paid at the NMW then they must be remunerated for all the time they spend at the disposal of the employer or overall they will be paid less than is allowed under the regulations.
Posted on 24 Feb 2017