National minimum wage increase could prove troublesome

From today, 1st April 2019, the national minimum wage amount is increasing. The exact price change varies by age:

25+ (Called the National Living Wage):

£7.83 changes to £8.21

21 — 24:

£7.38 changes to £7.70

18 — 20:

£5.90 changes to £6.15

Younger than 18:

£4.20 changes to £4.35

Apprentice (in first year of training):

£3.70 changes to £3.90

This is the new minimum amount that businesses must pay their staff, if they are eligible for it. (Check here for guidance on who is eligible) Last year, approximately 1.6 million workers in Britain were paid the minimum.

Many businesses find they struggle to adhere to the national minimum, often through ignorance on what counts towards it. In the 2017 — 18 year, the government discovered that 200,000 workers missed out on a record total of £15.6m. The industries most likely to fail to provide enough wages were social care, commercial warehousing and the gig economy, according to HMRC.

This is not just a problem for SMEs; well-known companies and brands who have fallen foul of this regulation include Wagamama, TGI Fridays, Card Factory, Odeon and Costa Coffee.

There are many different areas where businesses can inadvertently fall down. These include deducting uniform costs from wages (including making employees provide their own clothes), not paying for travel time, not increasing apprentice pay when necessary, or using the wrong time period to calculate the amount required.

Fines for violating this regulation can be up to 200% of the underpayments, maxed out at £20,000 per staff member.

In a statement to HR media website People Management, the head of reward and policy at CIPD, Charles Cotton, said,

"It would be helpful to receive more feedback from HMRC alongside these lists, giving not only the top reasons for undercutting wages but outlining the common mistakes made by companies that have been fined, whether it's not gathering enough data or failing to update their payrolls regularly," he said.

Tensor Time and Attendance Management System Helps Monitor Your Minimum Wage Compliance

Our system can help you to fix both of the problems named by Charles Cotton: gathering data and regularly updating payroll.

Whether staff use a contactless smartcard, their fingerprints, or the web browser and mobile app Self Service Module to clock in, the data is sent straight to the central Tensor.NET database.

Once the data is in the system, you can use our report wizard and advanced report customisation settings to create detailed reports on employee working hours, or simply export the clocking data in formats compatible with all leading payroll systems.

The software calculates the national Living and Minimum wages based on time worked, and will send you alerts if a violation would occur on a planned shift. It can separate 'worked time' into different overtime rates, can calculate flexitime balance, and can even insert breaks if employees forget to clock out for them.

If you are interested in keeping track of your attendance data and being able to use the information in many different ways to benefit your business, then please contact us for more information.