Informing uniformity

12 April 2018

This article was featured in the May 2018 issue of the magazine.

Danny Done, managing director at Portfolio Payroll, warns employers that uniform payment practices may be unlawful

Following the recent naming and shaming of organisations found to be breaking national minimum wage (NMW) requirements, some have sought to attribute their transgressions on a lack of understanding surrounding the practice of making employees pay for their own uniforms. As a result there has been some concern among employers surrounding the areas of uniforms and dress codes. 

In March 2018, 179 employers were identified by the government as failing to pay staff correctly in their most recent naming and shaming exercise. The list compiled by the Department for Business, Energy and Industrial Strategy found 9,200 workers had been unlawfully underpaid by a total of £1.1 million. The employers involved, who ranged from small family run businesses to large international organisations, were ordered to repay the arrears and pay fines totalling £1.3 million. 

The government has stated that ignorance of the law surrounding uniform payments is no excuse for breaking NMW requirements. Nevertheless, companies such as Wagamama and TGI Fridays explained they misunderstood how minimum wage laws applied to asking staff to wear certain clothing. There is, after all, no legal prohibition on making employees pay for their uniforms provided the appropriate contractual provisions are in place; and it is common for employers to do so. However, where employers may fall into error is failing to understand the impact of their contractual rules when employees are paid close to, or at, the appropriate rate of NMW or national living wage (NLW). 


...ignorance of the law surrounding uniform payments is no excuse...


Many organisations provide their staff with specific uniforms that help promote the company brand and ensure they are easily recognisable to customers, often employing a policy of automatic wage deductions to settle the cost. However, HM Revenue & Customs guidance on the matter states employers cannot deduct the cost of a uniform from their employee’s salary if this deduction takes their wages below the applicable NMW rate. This is particularly important given the increase to minimum wage rates in April so employers who use wage deductions to cover the cost of uniforms must do so with added care.

Employers also need to be careful when asking employees to purchase specific items from third parties as part of their uniform. For example, employees at Wagamama were required to wear either casual black jeans or a black skirt, along with a company branded t-shirt that was provided free of charge. Although employees could go to any shop to buy these jeans, by stipulating specific clothing items the restaurant created a mandatory ‘uniform’. In these circumstances, employers are not permitted to allow the cost of the purchase of the items to bring pay below NMW.

Given the above it is important to note the distinction between organisations that offer their staff an initial uniform free of charge and employees who choose to purchase additional uniform but are not required to do so. Under these circumstances any additional purchases are not deemed a requirement of the job and therefore a separate payment would not affect NMW pay, although deducting the cost from wages would. 

Not all employers require their staff to wear specific uniforms; instead, many grant their employees freedom to choose their own work clothes providing they abide by a specific dress code. Whilst dress codes may have a similar impact to uniforms in the way they can improve a company’s image and set workplace standards, they are generally far less restrictive and avoid creating any obligations for staff to purchase specific items. 

It is important to note that fresh government guidance on dress codes is imminent. This guidance is expected to highlight the current laws on discrimination and how they affect an employer’s dress code. This is a result of a petition brought by an agency worker who was sent home from work for refusing to wear high-heeled shoes. Whilst the government rejected the suggestion that new laws were needed to protect individuals from discrimination from the application of dress codes, it promised to attempt to increase employer awareness of the current rules. Simply requiring that all employees wear appropriate smart clothes, for example in an office environment, should ensure an employer’s desired image is met without crossing over into potentially discriminatory behaviour.

Whilst uniforms and dress codes can be a force for good in the workplace by ensuring equality and helping to promote a professional company image, employers would be wise to proceed with caution to avoid falling foul of NMW laws and discrimination. Organisations that are considering amending their policies surrounding uniforms or dress codes should consider the examples of recent firms who were punished for failing to carry out the necessary due diligence. It is also advisable to consult your workforce prior to making any changes, as favourable uniform and dress code policies are often linked to creating a more positive company culture.