COMPLIANCE
DLME strategy
The CIPP policy and research teamset out the response to the call for evidence
T he Director of Labour Market Enforcement (DLME) is responsible for setting a strategy that directs the activities of these three key employment enforcement agencies: ● HM Revenue and Customs (HMRC) which has responsibility for enforcement of
anecdotal evidence suggests that experiences when faced with a NMW inspection reveal problem areas that could have been avoided had guidance and information been more ‘joined up’. An example would be uniforms, which has relevance: for the employer from a tax and National Insurance contributions (NICs) reporting perspective; for the employee from a tax relief perspective; and for the self-employed from allowable expenses perspective. The rules for tax and NICs surrounding uniforms can be complex to understand; consider the wide definition used in describing a uniform for NMW purposes – and an area for error and mistake arises. Deductions from pay for earnings attachments issued by the courts and others, also give rise to error as HMRC have strictly defined these as being a deduction made ‘for the benefit of the employer’. Yet, because they are permitted to be made – as highlighted in the earnings attachment notice – the unwary employer falls foul of the rules where the employee is paid at or around the NMW rate. This continues to capture the unwary. Guidance and educational materials should cover the different impact that varying policies have on common themes and subjects. This would be a new provision and require significant cross- government working, with stakeholders potentially providing significant help in this endeavour. ● Sectoral guidance – The technical operation of NMW (and pay as you earn and NICs) largely does not vary across sectors. However, useful directed case studies within guidance and information
discussions with members and the wider profession during 2019.
CIPP response The CIPP does not condone intentional non-compliance and criminal activity which is typically representative behaviour of the most egregious employers. Our response to the call for evidence aimed to highlight some of the key challenges impacting employers striving both to achieve compliance with the complex structure of legislation governing worker rights and employer obligations across the UK, and to provide fair working conditions for their employees and workers. In the 2018/19 strategy, the DLME discussed concerns raised during the call for evidence as to the lack of a comprehensive programme of education and support for employers which would enable them to fully comprehend and thus comply in delivering employee and worker rights as they relate to the NMW. The DLME wrote: “where there is lack of intent, compliance theory would suggest that one effective enforcement approach is to concentrate on providing information, education and support to help prevent these mistakes. Stakeholders reported back to us however that this was not their experience with [minimum wage] enforcement.” CIPP’s recommendations ● Common themes – Although we have observed a slight increase in education delivery on the subject of NMW administration (e.g. webinars through the HMRC Talking Points programme),
national minimum wage (NMW) ● Gangmasters and Labour Abuse Authority (GLAA) ● Employment Agency Standards Inspectorate (EAS).
The post was originally held by Sir David Metcalfe, who retired in 2019 following publication of the DLME’s 2019/20 strategy. It is now held on an interim basis by Matthew Taylor who, following his review of modern employment practice, needs no introduction. The 2019/20 strategy focused on prioritising resources, helping employers to be compliant, and addressing serious/ persistent non-compliance via joint working across the three bodies. In the latter endeavour and for the most egregious cases, the three agencies work alongside police forces and the National Crime Agency. In the call for evidence for the 2020/21 strategy, which is to be presented to government by the end of March, the DLME has turned the focus on four key areas found to have high levels of non- compliance in delivering employment rights to their employees and workers. These comprise: agriculture, construction, hand car washes, and social care sectors. Despite this focus, stakeholders were not precluded from providing comments or evidence on other subjects or more general areas of employment. Due to the short time given to this consultation it was to this latter area that the Institute’s policy and research team focussed our response, using evidence and views gained from
...CIPP does not condone intentional non-compliance and criminal activity
| Professional in Payroll, Pensions and Reward | April 2020 | Issue 59 24
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