26.07.17 A notice of underpayment will not impose a penalty if “sleeping time” is concerned
26 July 2017
26 July 2017
The guidance on National Minimum Wage (‘NMW’) law enforcement has been updated to include Section 3.7.6 which details a Notice of Underpayment will not impose a financial penalty where all or part of the underpayment of NMW is prescribed to the time when a worker was, by arrangement, permitted to sleep during their working time and that part of the underpayment occurred in a pay reference period that ended before 26th July 2017.
A Notice of Underpayment is usually issued where a compliance officer finds that arrears of NMW/NLW are outstanding at the start of an investigation (which is defined as the date a compliance officer first contacts the employer, either by telephone, in writing, or both). The start of the investigation is the trigger point used to determine whether, in principle, a penalty should be imposed on an employer for non-compliance with the NMW/NLW.
The updated direction in the guidance means that up to £400m in penalties owed by care homes, who underpaid their care staff for overnight sleep-in shifts, will be waivered. Care homes, such as Mencap, who initially believed they owed thousands of pounds worth of back pay to its staff, paid an allowance to staff for the sleep-in night shifts as opposed to the hourly NMW.
Read our previous news item on this topic here.
Aspire Comment
The new direction will mean that those companies regularly paying overnight workers, such as care charities, are not put under the financial strain of meeting the penalties on the back payments, however, going forwards employers must ensure that staff are paid the hourly NMW/NLW for working time where they are permitted to sleep.
This risk of failing to pay the appropriate NMW/NLW to a worker when they are entitled to it can be very costly to your business and damaging to your reputation as there are large fines and the risk of being on the “naming and shaming” list for getting it wrong.
If you’re concerned about whether you have been correctly paying the NMW/NLW to your workforce then please get in touch with Aspire to discuss how we can help.