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This isn't small change (£36m) is it?
One would have thought that alongside; modern software, tip top HR advice and, all that goes with the John Lewis brand that this is embarrassing, to say the very least?
Never knowingly undersold, was the catch phrase, in my grandmother's day, when she was a china and glass buyer.
When she retired, the general manager of her store, used to telephone her, every Christmas Day.
Mike Ashley and, many other so called business moguls could learn a very salutary lesson on how to look after staff, from those seemingly much kinder days?
Generally, if you "invest" in your workforce, over the long term, you'll see a better "return".
What is the difference between a technical underpayment and an actual underpayment? If it is going to cost them £36 million to correct, is it really 'no big deal'? Can we have a bit more clarity in these articles please.
What is the difference between a technical underpayment and an actual underpayment? If it is going to cost them £36 million to correct, is it really 'no big deal'? Can we have a bit more clarity in these articles please.
As I understand it they pay their staff the same each month, but some months they might work 6 days extra by working weekends, then next month take some of those days off.
the month they worked the extra when you add up the extra hours and divided their monthly pay it took them below the minimum wage for the month.
over the year it works out correct
I love that paragraph:
"The issue was discovered after a worker raised concerns about their monthly pay following the publication of the firm’s annual results in March"
Is this another instance where the auditors are providing less than adequate competence
"HMRC's quite complex" national minimum wage regulations?
Hmm, the regs are not HMRC's but are those of the former trade and industry department (or whatever its name is today).
HMRC has the task of NMW enforcement.
Ok, I understand that in some months "partners" were underpaid (if they worked additional hours for no additional pay). However, surely in the months they worked less hours potentially they were overpaid. It states that the partners pay over a year was correct so why the additional provision/payment? Surely JL simply need to cease their policy of averaging ????
I assume it is because each payment is looked at in isolation.Ok, I understand that in some months "partners" were underpaid (if they worked additional hours for no additional pay). However, surely in the months they worked less hours potentially they were overpaid. It states that the partners pay over a year was correct so why the additional provision/payment? Surely JL simply need to cease their policy of averaging ????
Which, when you think about it, has to be the way it is done. If a person who has been underpaid leaves, then that underpayment will not be corrected. The only way to ensure that doesn't happen is to perform the check on a payment by payment basis.
The minimum pay requirements are simple. If you work an hour, you must be paid at or over minimum pay due for that hour (dependent on the start of the pay period being paid).
Confusion comes into play with: salary sacrifice, deductions for the benefit of the employer including statutory allowed court admin fees.
Spreading parts of pay into some future pay period is likely to not be an option.
Critical point in relation to averaging, 31 day months, and additional pay in April (when paid, not worked).
And some payments to employees don't count (such as overtime premiums) - simple.
Why can't NMW regulations be changed to allow averaging over a year with a strict calculation being done if someone starts or leaves in a year.
I have a lot of sympathy for JL and HMRC in the time they are having to waste on stupid red tape.
Employers have a lot to contend with these days and small employers in particular do not need the added expense and complication of trying to prepare payroll weekly when it is much cheaper and easier to calculate a salary based on the number of hours over a year and divide it by 12.
Someone with some common sense needs to change this massive waste of time.
The payments JL are now going to have to make will go to the employees to compensate them for the 31 day months when they only got paid for an averaged 30.4 days, with no compensatory redress for the months the staff got overpaid.
I will leave the morals and rights or wrongs of the NMW alone but this type of bureaucracy is just a waste of everyone's time and could easily be sorted.
I am astounded that a large supposedly 'caring' company such as John Lewis does not provide clear analysis of how their employees' pay is made up. If they are on a Salary and then sometimes add overtime at an hourly rate, then that is what should show on the payslip, as separate items. All good payroll software provides these options. Hourly paid workers should see the number of hours worked on their payslip. John Lewis deserves the fine, but this should not be taken out of employee bonuses.
In these circumstances the employees were technically and actually overpaid, then, by reference to their contracted hourly rates, in those months when they worked fewer hours. If the regs do not accommodate situations where the payments are not less than the NMW on an annual basis and thus create a technical breach on a monthly basis, their drafting is clearly unsatisfactory. This type of pay structure is not uncommon. The regs appear to need amending and it will be a pity if John Lewis and other employers may have to drop a pay averaging arrangement that their employees appear to want just to avoid falling foul of these regs.
'The payroll error could mean that thousands of John Lewis and Waitrose workers paid by the hour over the past six years could be in for an unexpected windfall, although the total amount due is not yet known'.
Lets hope the workers get something out of it, I always new J Lewis were a good employer.