Open Navigation

Payment and Wages

Identifying pitfalls and troubleshooting common mistakes

Paying employees for work done is one of the core duties of any employment relationship. Mistakes can cost more than just money, with mutual trust and confidence and business reputation at stake

Quite rightly, employees and workers will usually expect to be paid for the work they have done and to be paid at a level at or about the applicable National Minimum Wage (NMW) for the employee’s age and year in question.

Most scrupulous employers oblige without issue but accounting errors and mistakes can creep in and when they do it is important that swift, corrective action is taken.

Most contracts of employment will include provisions which relate to when and how an employee will receive payment for the services they have provided to their employer. In fact, employers are required under section 1 of the Employment Rights Act 1996 (“ERA”) to confirm this information to employees at the outset of their employment. Beyond the employment contract, sections 13 to 27 of ERA further make it unlawful for employers to make deductions from a worker’s wages unless certain exceptions apply. These exceptions are limited and narrow to prevent unscrupulous employers from cheating their staff out of wages. They also protect the employer in circumstances where owing to an accounting error an employee is overpaid.

It is permissible for an employee to consent to deductions being made from their wages. Think season ticket loans which are commonly repaid by monthly deductions from wages.

However wages and deductions are documented it is important for employers to pay their employees correctly as pay is central to an employment contract and infringements will likely not be taken lightly by an aggrieved employee, unable to pay his or her bills on time. In the worst cases, repeated or serious failure to pay wages could amount to a fundamental breach of contract and lead to constructive unfair dismissal claims (see our section on Employment Claims).

Failure to pay employees in accordance with National Minimum Wage requirements not only results in claims by employees but also potential fines and naming and shaming on the Government website for failing to comply with NMW obligations – and yes, interns must be paid at least NMW!

News

COVID-19 Legal Right to Work Check Concessions End on 20 June 2021

The UK Home Office has provided employers with latitude in meeting Legal Right to Work (LRTW) Compliance requirements during the COVID-19 pandemic through a series of concessions. One such concession enables employers to conduct right to work checks remotely, thus not requiring employees or HR personnel to be physically present in an office for the…

Read More
Passport

Is it legal to use coronavirus passports in the UK?

The vaccination programme has been very successful, with over 30 million adults receiving their first inoculations and over 4 million, their second. Until the last few months, the UK government said that requiring coronavirus passports in order to access certain services and foreign travel was discriminatory and therefore would not be adopted.  This view now…

Read More
Immigration Advice based upon the MAC Report

Migration Advisory Committee: Call for Evidence

The Migration Advisory Committee (MAC) is a body of independent expert economists retained by Government to advise on immigration policy reform in the context of prevailing labour market and UK business needs. The MAC undertakes extensive labour market and stakeholder research before publishing recommendations for change following commissions from the Home Office. A MAC review…

Read More