New Government campaign to crack down on salons underpaying staff
Beauty and hair salons are being targeted in a new Government campaign launched today (July 29) to crack down on employers who pay their staff below the National Minimum Wage.
The campaign is the first of its kind for HM Revenue and Customs (HMRC) and the Department for Business, Innovation and Skills (BIS).
The crackdown follows BIS research that showed hair and beauty is the worst offending sector for underpaying apprentices, with 42% of businesses paying below the legal minimum for trainees.
As part of the campaign, HMRC will give employers tools and guidance to check whether they are paying the correct amount, and make corrections if they are not. Salon owners will be given six months to take this opportunity to “self-correct” their pay. If they do, they will not have to pay penalties and will not be “named and shamed” by HMRC.
After the six-month grace period, if employers are found to be paying below the National Minimum Wage (NMW) or to have paid unfairly in the past and not reimbursed the employee, then HMRC will take action against them, which could result in a fine of up to £20,000 per employee, and in being named publically.
The Government departments consulted with Hair and Beauty Industry Authority (Habia) and National Hairdressers’ Federation (NHF) on the campaign, and the two associations have pledged to work with salons to help them understand their obligations.
Jennie Granger, HMRC director general of enforcement and compliance, said, “Some employers will need a bit of a reminder to check they are getting it right, and some will need stronger action from us, so we are bringing in more enforcement officers to support this campaign.
“I urge all employers and employees in the sector to check that salary is being paid correctly, as we will use these extra resources to find and investigate where it is not. Check you’re paying NMW correctly – it’s worth it."
The NHF said in a statement, "The NHF’s experience in handling thousands of calls on the National Minimum Wage shows that the most common errors are made with apprentices as rates vary depending on age and at different stages of training. Many employers are also not aware of what they are allowed to deduct from wages, for example for uniforms or for accommodation, and many remain unaware that using tips to top up pay to the national minimum has been illegal since 2009."
Employers who are unsure of NMW rules and want to find out more can get free advice through the Acas helpline on 0300 123 1100.
Hair and beauty businesses are being asked to come forward as part of the National Minimum Wage Campaign by disclosing details of arrears now paid to their workers and confirming that wages worth at least the NMW are now paid to all workers via www.gov.uk/nmwcampaign or by calling the dedicated helpline on 0300 123 2671.