In a statement, the retailer said it had been working with HMRC to review its payroll processes and rectify the breach of pay regulations.
It said: “This review has revealed a historic, unintentional breach of the regulations in respect to its staff discount policies for Monsoon clothing. Monsoon is pleased that this issue has been identified and has already taken prompt action to remedy it.”
The company allegedly requires all staff to wear Monsoon clothes while on duty. It was even indicated that staff previously had to purchase these at a discounted rate out of their own wages. This expense has meant that many employees went home with less than the NMW.
Sally Hulston, managing associate at Addleshaw Goddard, explained that it was a common trap companies such as Foot Locker and French Connection fall into – both of which failed to pay the minimum wage for the same reason.
Hulston said: “Like Monsoon, they also cited errors in the way that staff uniform policy was conducted for being responsible for the breaches. In light of this, employers are encouraged to review their dress codes and introduce additional administrative checks if necessary.”
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Audrey Williams, partner at Fox Williams, is of the belief that it is an employer’s duty to ensure staff benefits are not counted towards a worker’s average salary.
“That figure must be calculated after a number of specified deductions and there is a list of items which by law cannot count towards the NMW, including overtime rates, expenses and allowances,” she explained.
Similarly, James Major, partner at Clyde & Co, suggested that businesses who require employees to purchase uniform, tools, equipment or other products need to be aware that the cost to staff will be considered a deduction for NMW purposes.
As such, many current employee benefits packages could be in breach of pay regulations – Major urged businesses to review and update policies in light of Monsoon’s case.
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