With more companies ‘named and shamed’ recently for not paying the National Minimum Wage, Mark Roby, HR advisor, and Jowanna Conboye, intellectual property & IT solicitor, look at what businesses can do to protect their reputations.
In October, the Department for Business, Innovation & Skills (BIS) ‘named and shamed’ 115 employers who had failed to pay their workers the National Minimum Wage (NMW). Between them, the companies owed workers over £389,000 in arrears and came from a wide range of sectors.
The current NMW rate, for those 21 and over, increased to £6.70 per hour on 1st October 2015. From April 2016, the new mandatory National Living Wage (NLW) will be £7.20 per hour for workers aged 25 and older. The Government’s aim is for the NLW to reach £9 an hour by 2020.
On the face of it, paying the NMW correctly appears a relatively straightforward task. However, there are pitfalls.
The BBC reported that the company at number 1 in BIS’s latest list, Monsoon Accessorize, who underpaid 1,438 staff by a combined total of £104,508, did so because of a policy of offering staff discounted clothing to wear at work. That cost was deducted via wages, which led to their hourly pay dipping below the legal minimum.
This episode is a reminder that getting it wrong in what may seem a straightforward area of employment law could have a serious effect both in terms of your general commercial reputation with customers as well as your ‘employer brand’ and ability to attract skilled candidates in a competitive labour market.
With the April 2016 changes on the horizon, employers are advised to review payroll systems to ensure employees are receiving the legal minimum. Particularly where any lower paid employees have arrangements where deductions are being made direct via payroll, the BBC’s recent news report is a reminder that this can be a risk area.
BIS’s approach is a deliberate one to ‘shame’ employers into compliance. Whatever the size of your business, bad news spreads quickly and widely in today’s social media world. If unexpected bad news hits your business, do you have a plan or resources in place to help you manage such an event?
When a story like this breaks in the media both on and offline, how a business reacts publicly can make or break its reputation. Reputation management starts with protecting your brand through trade mark registrations and other intellectual property protections. It is important to take action to protect your reputation wherever your rights are infringed or where someone tries to ‘piggy-back’ on your business by passing-off your brand as their own.
It is essential for businesses to have a strategy for reputation management which will allow them to react quickly to breaking news about their business. One of the best ways to see what’s being said about your business is by monitoring social media. Social media monitoring tools tend just to watch one type of media or account. Stephens Scown have a social media monitoring tool that tracks all social media outlets and gives live updates on when and where stories (good or bad) about your business go viral.
A social media monitoring service is an invaluable tool for gauging public reaction to the story, deciding how to respond and continually evaluating your responses. It can also help you evaluate which business marketing campaigns are gaining the most traction on social media. Active reputation management can help take the sting out of ‘naming and shaming’.
The Stephens Scown employment team works in partnership with organisations to improve their HR practices and advise on employment issues. To discuss this or any other HR issue call 01392 210700 or employment@stephens-scown.co.uk.