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When having a dress code can lead to a national minimum wage breach

Money in jarRetailer Monsoon Accessorize tops the list of over 100 employers that have been “named and shamed” by the government for failing to pay workers the national minimum wage.

The shop, which is the largest company on the list, has been highlighted for neglecting to pay £104,507.83 to 1,438 workers– almost a quarter of its UK staff.

Monsoon requires all staff to wear Monsoon clothes when working in the shop. The dress code previously required employees to purchase the store’s clothes at a discounted rate out of their wages, which meant that many staff were taking home less than the legally required minimum wage after this compulsory expense was taken into account.

The company has stated that it has taken action to address the “unintentional breach” of minimum wage regulations, and has been ordered to pay a fine of £28,147.81 for the breach of pay rules, as well as reimburse staff.

It is common practice in the retail and hospitality sector to require employees to purchase (often at a discount) uniform, tools, equipment and other products. Businesses need to be aware that compulsory expenses such as these will be considered as a deduction for national minimum wage purposes, and could mean that an employee’s average salary falls below the legal minimum.

The national minimum wage was increased in October 2015 and will increase again in April 2015 when the new living wage is introduced. For information on the changes, see our blog.

If you are looking for advice on the national minimum wage, please get in touch with your usual Brodies’ contact.

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