Policies & Issues: Employment
NATIONAL MINIMUM WAGE
The British Retail Consortium strongly supports the National Minimum Wage (NMW) as a base floor for decent pay. In order for businesses to manage increases in the wage and to avoid having to cut costs elsewhere, NMW increases must be closely aligned with average wage movements. Like many sectors, retail has been particularly hard hit by the recession, so it is particularly important that a cautious approach is taken to NMW increases until a full economic recovery has taken place. The BRC is therefore disappointed that the Government has decided to impose a 2.2% increase on businesses from October this year. This rise is considerably higher than the average pay increase across the UK of 1% in the year to January 2010 and is at odds with what's happening to pay generally – with many employers forced to freeze pay to safeguard jobs.
Once the economy returns to stability, the BRC is asking the Low Pay Commission (LPC) to establish a more predictable relationship between NMW and average earnings movements - while ensuring that NMW does not increase faster than average earnings. This will also mean the LPC provides a more long-term outlook for the minimum wage than the current six months, giving businesses more certainty about the direction of future costs.
National Minimum Wage
Advice for BRC retail members from HMRC
The new rates of National Minimum Wage (NMW) to come into effect from 1 October 2011 have been announced. These are
- Workers aged 21+
- Workers aged 18-21
- Workers below 18 and beyond compulsory school attendance
- Apprentice rate*
* Please note that apprentices who have completed one year's service with the employer and have reached the age of 19 are entitled to NMW at the appropriate age rate.
In our experience as an Enforcement Agency we have seen patterns as to why businesses fail to pay National Minimum Wage. Most do so unintentionally, so could that include you?
Have a look below at some of the main reasons that businesses fail to pay the legal minimum.
1. Failure to record working time properly. Is the worker required to arrive early? Leave late? Do stock takes take place outside of normal working hours? This is time that is taken into account when calculating if a worker has received NMW. Remember it's the time that they are required to be at work that is measured not just when they are working on the shop floor.
2. Apprentices. Did you know that since 1st October 2010 all apprentices are entitled to a NMW apprentice rate for all the time they are in work or training? Are you aware that after a year's service and reaching the age of 19 they should get at least the rate appropriate to their age? More Info
3. Birthdays!! It's surprising how many businesses don't have a system in place that will alert them to when a worker is due an increase when they turn 19 or 21 for example. Some payroll software will do this for you, but noting an electronic calendar is always good practice.
4. Deductions from pay. In most cases money deducted from pay and kept by the employer, even with the worker's permission, is taken off of pay before NMW is calculated. Examples include charges for administration, transport, uniform, tools, clothes from the store, purchases of goods and services even the lottery syndicate!
5. Work related expenses. If a worker is required to buy safety boots, uniforms, etc, then this is a work related expense, even if they can buy it from anywhere. The cost of this would reduce NMW pay.
6. Piece rates. Some workers are paid by the piece produced. However if the worker is required to work within given times then they must receive at least NMW for this amount of time. For guidance on piece work please click here.
7. Accommodation. Any charges collected by a business in relation to accommodation provided to a worker are connected to the payment of National Minimum Wage even if the employment is not directly connected to the employment. For further guidance, please click here.
Further National Minimum Wage Information can be found at:
The Direct Gov Site
Pay and Work Rights Helpline: 0800 917 2368