Minimum wage: Wagamama falls foul of uniform rules

iStock_Rawpixel Ltd_AW
Share this content

The restaurant chain Wagamama is one of nearly 180 employers named by the government for not paying the National Minimum Wage (NMW). But the restaurant chain's case is notable for another reason: staff uniforms.

All in all, 43 businesses in the hospitality industry featured in the latest list, including names like TGI Friday’s and Marriott Hotels. Around 9,200 workers will receive £1.1m in unpaid wages, and the employers were slapped with £1.3m in penalties.

British-based asian food chain Wagamama topped the list, repaying an average of £50 to 2,630 employees. The Wagamama case, however, is interesting for another reason, however.

A spokesperson for the restaurant chain blamed its underpayment on an “inadvertent misunderstanding” of how minimum wage laws apply to staff uniforms.

Front-of-house staff are required to wear black jeans or a black skirt with their branded Wagamama top. The government considered this asking the staff to buy a uniform.

But as AccountingWEB member New Moon observed on Any Answers, “The case seems to centre around asking staff to wear a particular colour or style of clothing is effectively creating a uniform, even though the items of clothing don’t have a logo and would previously be called dual purpose by HMRC.”

Wagamama said it has updated its uniform policy and it will now pay “a uniform supplement to cover the black jeans”. But it still raises the question: Can non-logo clothes be treated as uniform for tax purposes?

In reply to New Moon’s query, SteLacca said, “I suspect that HMRC would maintain that the jeans are not a uniform, and that they serve a duality of purpose, and so are not an allowable expense, and the payment for them is a taxable benefit (or, if cash/wages - taxable via PAYE).”

RBW provided an excellent answer to the question, noting that it’s helpful to “to bear in mind that what is and isn't pay for NMW purposes is not and never was based on tax definitions”.

He concluded, “As far as I understand it, Wagamama's failure was that they didn’t pay a uniform allowance over and above the minimum wage. They just required employees to wear certain clothing. After deducting reasonable costs of such clothing from the pay the employees were left with a net rate of pay below the NMW.

“The employer could have avoided that NMW failure by (a) paying a specific allowance for clothing or (b) a rate of pay with sufficient headroom to cover the clothing. Either way as far as I can see there's no implication for tax.”

About Francois Badenhorst


I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter. 


Please login or register to join the discussion.

14th Mar 2018 14:20

I'll head with the big question.......can I now claim for the shirt and tie I wear to work?

Thanks (0)
to kestrepo
15th Mar 2018 11:11

The article is pretty clear that the answer is No.

Thanks (0)
15th Mar 2018 09:56

You beat me to it kestrepo...My employer required that we wear business attires ( so not uniform as such) and it is in our contract of employment. I get paid above the NLW, but some of my colleges are just above the NLW, namely apprentices...does that mean that we are all going to receive an additional payment to cover our business attires? somehow, I doubt it very much.

Thanks (0)
16th Mar 2018 12:50

This is going to far and where does it stop?

Does this mean that if you impose any sort of dress code, such as you have to wear shoes/boots and you can't wear trainers, you will get caught by this ruling?

Thanks (0)
16th Mar 2018 17:09

That has interesting implications for other industries where for example a licence or annual certification is required.

I worked in a security company many years ago and it became a requirement to have an SIA registration, so I guess this would be treated in the same way unless employees are paid an amount above the NMW enough to cover that cost and so on.

Thanks (0)