New National Minimum Wage campaign

30 July 2015

As part of this ‘first of its kind’ campaign, HMRC and the Department for Business, Innovation and Skills (BIS), supported by the National Hairdressers’ Federation and the Hair and Beauty Industry Authority, will work with hair and beauty businesses to help them understand their pay obligations to their employees.

HMRC will provide employers with tailored tools and guidance to check if they are paying the correct amount, and put it right where they are not. Employers who take this opportunity to self-correct will not have to pay penalties, nor will they be ‘named and shamed’. If employers choose not to comply with their NMW obligations, HMRC will take action to ensure that employees are paid what they are owed.

HMRC action to tackle employers who fail to pay the minimum wage identified £3.2 million in NMW arrears involving over 26,000 workers across a range of sectors in 2014/15 alone. The Government is committed to ensuring every employee receives at least the NMW, and HMRC is committed to helping workers to recover any money owed to them.

BIS analysis shows that 42% of businesses in the sector do not pay level 2 and level 3 apprentices the correct minimum wage – the highest underpayment rate of any sector. Those paying under the minimum wage now have a chance to put things right. If they fail to do so it could result in their business being publicly ‘named and shamed’ and facing a fine of up to £20,000 per employee.

There are nearly 55,000 businesses and 250,000 employees in the hair and beauty sector in the UK. The typical hourly rate of pay is £7.11, compared with £11.61 in other sectors. Employees can report under-payment of the NMW at Pay and work rights.

Hair and beauty businesses are being asked to come forward as part of the National Minimum Wage Campaign by:

  • Telling HMRC they want to take part in the campaign
  • Disclosing details of arrears now paid to their workers and confirming that wages worth at least the NMW are now paid to all workers.

For full details including ‘Common mistakes’ and ‘What to do if you haven’t been paying National Minimum Wage’ visit National Minimum Wage campaign.

CIPP comment

It was announced in Autumn Statement 2014 that funding for NMW enforcement activity in 2015-16 would be increased by £3 million. So whilst these high level announcements at the time are not directly operational, they do impact our workload in the long term. The Summer Budget 2015 announced that an additional £1 million would be invested to expand HMRCs data analytics and enforcement teams. This new campaign is the first step in expanding HMRCs compliance activities using ‘smart data’ – the new term we shall no doubt become very familiar with.

The CIPP are supportive of this initiative. Samantha Mann, Senior Policy & Research Officer says “We believe that when you are responsible for paying employees you should ensure that they are paid ‘on time and accurately’. Additionally, in ensuring that employees receive the pay that they are legally entitled to, employers in business are enabled to compete on a more level playing field.”