How can we establish if we have been paying staff less than the minimum wage?

Q. I am the only person looking after payroll for a small engineering company with just under 100 employees. Last week, one of our staff members, who work a standard 35 hour week, spoke to our HR manager as we have been paying him less than the statutory minimum wage. The situation appears to have been sorted out, but we are worried about finding other people in the same boat. What is the best way to do so quickly in order to avoid further embarrassment?

I understand from our further correspondence that you have no proprietary HR system and that your HR records are kept on spreadsheets.

So the simplest way to get hold of the information you need is to establish what the current minimum wage levels are in your country and then produce a spreadsheet with the following information headings:

Employee Number, Date of birth, Hours per week & Annual salary

Sort the report in ascending date order as doing so will give you the oldest first and the youngest last, as shown in the example extract below:

From here, you can take a number of approaches, but the easiest from a reference point of view is to set up the calculation in your spreadsheet in order to determine the hourly wage of each staff member - divide their salary by 52 weeks x hours worked and compare it to the minimum wage for that age group. For example, in the UK, current minimum wage levels are:

Using the figures above as the basis of the calculation, this is what your report would  look like:

Employee ages at that point will depend on the date you run the report, but broadly speaking, we can see from the above that three employees were not paid in compliance with the law. Also remember that if overtime is paid at a multiple of the hourly rate, retrospective compensation will need to be paid there too.

As for the future, it is incumbent upon your HR colleagues to check that pay rates contained in job offers are in compliance with the regulations. It is your role to execute on the instructions given to you to pay that rate. But perhaps it might make sense to talk the situation through with your HR colleagues.

While most employees will be happy to be compensated for any oversight, there might always be one who is not so easy to appease. Therefore, the earlier this situation is checked and sorted out, the better.

- 

Denis Barnard, the founder of the Global Payroll Association's HRcomparison.com, investigates what to do should you discover you have accidentally fallen foul of the law.

Please drop Denis a line at denis.barnard@hrmeansbusiness.com if you require help with any of your tech  trials and tribulations and he will be happy to answer  your queries here.l

Q. I am the only person looking after payroll for a small engineering company with just under 100 employees. Last week, one of our staff members, who work a standard 35 hour week, spoke to our HR manager as we have been paying him less than the statutory minimum wage. The situation appears to have been sorted out, but we are worried about finding other people in the same boat. What is the best way to do so quickly in order to avoid further embarrassment?

I understand from our further correspondence that you have no proprietary HR system and that your HR records are kept on spreadsheets.

So the simplest way to get hold of the information you need is to establish what the current minimum wage levels are in your country and then produce a spreadsheet with the following information headings:

Employee Number, Date of birth, Hours per week & Annual salary

Sort the report in ascending date order as doing so will give you the oldest first and the youngest last, as shown in the example extract below:

From here, you can take a number of approaches, but the easiest from a reference point of view is to set up the calculation in your spreadsheet in order to determine the hourly wage of each staff member - divide their salary by 52 weeks x hours worked and compare it to the minimum wage for that age group. For example, in the UK, current minimum wage levels are:

Using the figures above as the basis of the calculation, this is what your report would  look like:

Employee ages at that point will depend on the date you run the report, but broadly speaking, we can see from the above that three employees were not paid in compliance with the law. Also remember that if overtime is paid at a multiple of the hourly rate, retrospective compensation will need to be paid there too.

As for the future, it is incumbent upon your HR colleagues to check that pay rates contained in job offers are in compliance with the regulations. It is your role to execute on the instructions given to you to pay that rate. But perhaps it might make sense to talk the situation through with your HR colleagues.

While most employees will be happy to be compensated for any oversight, there might always be one who is not so easy to appease. Therefore, the earlier this situation is checked and sorted out, the better.

- 

Denis Barnard, the founder of the Global Payroll Association's HRcomparison.com, investigates what to do should you discover you have accidentally fallen foul of the law.

Please drop Denis a line at denis.barnard@hrmeansbusiness.com if you require help with any of your tech  trials and tribulations and he will be happy to answer  your queries here.l