Employers across the country have been given a stark wake-up call to ensure they are getting the basics right after the government announced that nearly 500 employers have been fined more than £10million for failing to pay the National Minimum Wage.
The announcement from the Department for Business and Trade, which named the businesses – including several well-known high street brands – demonstrates the government’s heightened priority towards workers’ rights and a reminder that businesses need to continue to monitor and abide by changing regulations.
As part of the wave of reforms being ushered in by the Employment Rights Act 2025, enforcement of the NMW and other entitlements including holiday pay and SSP, will be passing to the new Fair Work Agency. Under the Govt’s Road Map this is due to be established in April 2026, with the work to bring different agencies together starting then.
As yet, it is unclear when the new powers of enforcement will be brought into force, what we do know is that they will include powers to impose fines and penalties and as under the existing NMW enforcement, these could be costly.
Key areas businesses should review regularly include:
- Pay and remuneration structures: This includes National Minimum Wage and National Living Wage compliance, overtime, bonuses, salary sacrifice arrangements and deductions.
- Employment contracts: Ensure they are up to date, legally compliant and accurately reflect working practices.
- Recruitment and onboarding processes: This includes right to work checks and fair, non-discriminatory hiring practices.
- Working time arrangements: Make sure you are compliant and clear with staff on hours of work, rest breaks, holiday entitlement and holiday pay calculations.
- Policies and procedures: Such as disciplinary, grievance, absence management, family-friendly rights, whistleblowing and equality policies.
- Equality, diversity and inclusion obligations: This includes reasonable adjustments, equal pay considerations and protection from discrimination and harassment.
- Managing performance: Be clear, consistent and fair when dealing with conduct and capability issues to reduce the risk of claims.
- Training for managers: Ensure they are up to date on their legal obligations and how to handle employee issues appropriately.
Kerrie Hunt, Thrings’ Head of Employment, said: “With so much attention being paid to the changes being ushered in by the Employment Rights Act, it is important that businesses continue to get the basics right.
“Taking the time to regularly review the detail surrounding your employees, their rights, their pay and their working conditions needn’t be a laborious task if it’s scheduled at key points in the year. Taking legal advice to ensure you are fully compliant could save you a great deal of time and money avoiding legal action and maintaining an engaged and productive workforce.”
Thrings’ Employment lawyers are experienced in dealing with business matters that affect the workforce and has acted for both employers and employees from start-ups and SMEs all the way to multinational corporations across a wide range of employment matters. To find out how they can help strengthen your polices, and solve your disputes, please get in contact.
