COMPLIANCE
Governance in business: a joint responsibility
Jeni Morris ACIPP, head of the national minimum wage (NMW) team at EY, considers how to forge a collaborative approach to NMW compliance in your workplace and why it’s good business practice to do so
I n today’s dynamic business environment, ensuring compliance with the NMW regulations is not just a legal obligation but a critical aspect of ethical business practice. The governance of NMW compliance is a shared responsibility that spans across various levels and departments within an organisation. This collaborative approach is essential to mitigate risks, uphold the company’s reputation and foster a fair and equitable workplace. Understanding NMW governance NMW governance refers to the policies, procedures and practices that a business implements to ensure all employees are paid at least the minimum wage as mandated by law. This governance framework is designed to prevent wage exploitation and ensure fair compensation for all workers. The role of leadership Leadership plays a pivotal role in setting the tone for NMW compliance. Who in your business takes this leading role for compliance in this area? Senior executives and board members must prioritise NMW governance as part of the company’s broader compliance and ethical standards. This involves: l policy development: establishing clear policies that outline the company’s commitment to NMW compliance l resource allocation: ensuring that adequate resources are allocated for compliance activities including training, auditing, and monitoring
l accountability: holding managers and supervisors accountable for enforcing NMW policies within their teams. Human recourses (HR) and payroll departments The HR and payroll departments are at the forefront of NMW compliance. Their responsibilities include: l accurate record-keeping: maintaining precise records of hours worked and wages paid to ensure compliance with NMW regulations l regular audits: conducting regular internal audits to identify and rectify any discrepancies in wage payments l employee training: providing training to employees and managers on NMW regulations and the importance of compliance. Line managers and supervisors Line managers and supervisors have a direct impact on NMW compliance. Their responsibilities include: l monitoring hours worked: ensuring that employees’ working hours are accurately recorded and reported l addressing concerns: being the first point of contact for employees who have concerns or questions about their wages l implementing policies: enforcing NMW policies and procedures within their teams. Employees Employees also play a crucial role in NMW governance. They should be encouraged to: l stay informed: understand their rights
regarding minimum wage and be aware _.of the company’s NMW policies l report issues: notify HR or their supervisors of any discrepancies or concerns about their wages. Collaborative efforts Effective NMW governance requires a collaborative effort across the entire organisation. This includes: l cross-departmental communication: ensuring that HR, payroll and other relevant departments communicate effectively to address compliance issues l continuous improvement: regularly reviewing and updating NMW policies and procedures to reflect changes in legislation and best practices l external audits: engaging external auditors to provide an unbiased assessment of the company’s NMW compliance. Commitment and cooperation NMW governance is a joint responsibility that requires the commitment and cooperation of all levels of a business. By fostering a culture of compliance and ethical practice, businesses can ensure that they not only meet legal requirements but also promote a fair and equitable workplace for all employees. This collaborative approach protects the company from legal risks and also enhances its reputation as a responsible and ethical employer. n
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| Professional in Payroll, Pensions and Reward |
Issue 107 | February 2025
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