High-street fashion retailer Monsoon Accessorize has been publicly shamed after failing to pay employees the minimum wage. The company was 1 of 115 businesses to be named in HM Revenue & Customs latest crackdown on non-compliant payment practices.
Details published showed that Monsoon Accessorize had underpaid 1,438 employees amounting to a total of £104,507.81. The company was in breach of the pay regulations due to their policy regarding staff uniform. As part of their dress code, staff are required to wear clothes only sold by their employer like a large number of retailers. Although employees were entitled to the clothes at a discounted price, the additional cost placed the wage received below the legal threshold. The money owed has since been repaid to staff and Monsoon has also been forced to pay a £28,147.81 fine.
This case has served as a reminder to employers of the importance of conducting regular reviews into their payment practices. Companies should take into consideration any mandatory expenses such as uniform costs when calculating the minimum wage.
Poor payment practices can have a detrimental effect on workplace morale and productivity. Where issues are handled inadequately or left unresolved, businesses may find themselves susceptible to employment tribunal claims including unlawful deduction of wages.
As always with employment matters, adopting a proactive approach is the best method to prevent issues surrounding pay arising. In light of the introduction of the National Living Wage set to come into effect in April 2016, businesses should carefully consider their current payment practices and the financial implications going forward. Small retailers and SMEs in particular are encouraged to assess how the pay increase could impact their staffing structures and internal policies.
Here at Farleys Solicitors our specialist Employment Law & HR team can advise you on any queries you may have regarding your business’ payment practices. For further information call 0845 050 1958, alternatively please complete an online enquiry form.