NMW guidance on unpaid work trial periods 21 December 2018
A new section has been added to minimum wage guidance covering unpaid work trial periods which includes several example scenarios to assist employers.
The views of the Government set out in this guidance are not binding or determinative in any case but are intended to assist employers and individuals in identifying circumstances in which at least the National Minimum or National Living Wage (NMW / NLW) must be paid. It is for HMRC enforcement officers, and ultimately for tribunals and courts, to decide whether the NMW / NLW should be paid in any particular case. Employers who do not pay at least the NMW / NLW for work trials should consider seeking professional advice on whether this would breach NMW or other employment law. As part of a recruitment process, an individual may be asked by a prospective employer to carry out tasks, without payment, to help the employer to decide whether the individual has the skills and qualities required for the job. Often this will be a legitimate practice, but some employers may use unpaid trial work periods to obtain work or services for which at least the NMW / NLW should be paid. Current law does not define a “trial work period” or state precisely when at least the NMW / NLW must be paid. NMW legislation provides that an individual who is “working” for minimum wage purposes must be paid at least the NMW or NLW. Most workers in the UK who are over compulsory school age and who ordinarily work in the UK are entitled to be paid at least the NMW / NLW.
See pages 20 to 25 of the guide on NMW / NLW - Calculating the minimum wage to read the new section on unpaid work trial periods.
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Iceland to fight HMRC over minimum wage dispute 4 January 2019
Iceland is facing a £21m bill from HM Revenue & Customs, which alleges that the supermarket chain broke minimum wage rules with a Christmas savings scheme.
According to Economia, the Treasury Select Committee is to question HMRC over its threat to land Iceland with a £21m bill over a Christmas scheme which it runs for its employees. HMRC claims the Christmas Club is in breach of national minimum wage rules but the Committee wants to know why the department is investigating the Club when the scheme is voluntary, the money is ring fenced in a separate bank account controlled by an independent trustee company, and staff can get their money back in its entirety at any time.
HMRC argues that once the sums of money for the scheme are deducted from the employee’s pay, what is left is technically below the minimum wage, despite that fact the money eventually comes back to the employee.
The chief executive and founder of Iceland Foods has described the dispute with HMRC as "just madness". He intends to fight the HMRC claim, which was first reported in the Times.
According to BBC news, Iceland has also been told by HMRC that its policy on footwear breaches minimum wage rules as well. HMRC said that staff should be compensated for shoes bought for work, as Iceland had given staff guidance that "sensible shoes" should be worn. The guideline applies only to staff who work in stores, since warehouse staff are provided with safety shoes.
CIPP comment
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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