Government’s Working Lives Report lays bare the scale of non-compliance
Leading audit, tax and consulting firm RSM UK says employers should review HR and payroll processes now, as research from the Fair Work Agency and Department for Business and Trade shows widespread non-compliance and legal issues affecting at least 5.4m UK workers.
The Working Lives Report found one in seven workers have experienced at least one of the key legal and compliance issues the Fair Work Agency has been established to enforce, including National Minimum Wage, payslip inaccuracies, issues with contracts and key information documents, and unfair work finding fees. The report comes as RSM UK’s own Workforce Survey recently identified only 15% of employers felt they were already fully compliant with the Employment Rights Act, meaning many may now be leaving themselves open to large fines from the Fair Work Agency.
Chris Robson, Employment Tax Partner and Fair Pay Lead at RSM UK said: “These statistics highlight concerning widespread issues among employers in the key areas the Fair Work Agency is now enforcing. A significant number of workers have experienced an issue, meaning problems are widespread throughout all industries and types of employers. Issues like NMW and holiday pay are complex, and employers often inadvertently get them wrong due to a lack of understanding of their obligations.
“Many believe they are getting it right, but there is a gap between perception and reality, as our own workforce survey showed half of employers rely on payroll software to calculate things like holiday pay. Often these off-the-shelf packages don’t account for the many nuances in pay rules which could now leave employers open to errors, leading to hefty fines as the Fair Work Agency begins enforcement.
“The Government’s findings demonstrate the importance of setting up HR and payroll systems based on legislation, rather than relying on off the shelf systems and software. Employers must be very clear on what types of workers they employ, and ensure that all systems are fully aligned to this, to avoid enforcement action including naming, penalties and fines by the Fair Work Agency.”