Staff employed by sports clubs/grounds not paid minimum wage

[pemma]

Out of the 239 companies HMRC has named and shamed for failing to pay the minimum wage it includes the usual types of suspects - cleaning companies, hairdressers, small shops, care homes, hotels and big companies (who either think they're too big to get challenged or who will blame an admin error.) However, this time a number of sports clubs/grounds have made appearances:

1. Bristol City Football Club Limited, trading as Bristol City F.C., Bristol BS3, failed to pay £14,342.73 to 50 workers, with average arrears of £286.85 per worker
2. Manchester Sale Rugby Club Limited, trading as Sale Sharks, Trafford M31, failed to pay £7,445.51 to 1 worker, with average arrears of £7,445.51 per worker
3. Huddersfield Giants Limited, Kirklees HD1, failed to pay £7,801.70 to 24 workers, with average arrears of £325.07 per worker
4. Durham Cricket C.I.C., trading as Durham County Cricket Club, County Durham DH3, failed to pay £6,029.64 to 2 workers, with average arrears of £3,014.82 per worker
5. The Northampton Town Football Club Limited, trading as Northampton Town F.C. Northampton NN5, failed to pay £1,121.64 to 85 workers, with average arrears of £13.20 per worker
6. Vikings Sports Foundation Ltd, Halton WA8, failed to pay £1,026.47 to 1 worker, with average arrears of £1,026.47 per worker
7. Newcastle Rugby Limited, trading as Newcastle Falcons, Newcastle upon Tyne NE13, failed to pay £933.55 to 140 workers, with average arrears of £6.67 per worker
8. Derbyshire County Cricket Club Limited, Derby DE21, failed to pay £225.16 to 1 worker, with average arrears of £225.16 per worker
9. Stadium Event Company (UK) Ltd, trading as Stadium Events, Leeds LS1*, failed to pay £316.79 to 1 worker, with average arrears of £316.79 per worker

* Who employ people to provide VIP experiences at Headingley stadium.
Source: https://www.mirror.co.uk/news/politics/239-companies-named-shamed-failing-12862121

Has something gone wrong in the sports industry recently or have HMRC caught up with an industry that's not being treating its' employees properly?

 

[kevconnor]

Generally speaking you tend to find industries where there is lower power base, transient workforce, low skills base and/or high turnover of employment leads to low pay. Why then these particular industries tend to have a higher propensity of organisations who fail to pay NMW is fora number of reasons, HMRC do target higher risk industries, there is due to the power imbalance between employers and employees and low levels of union representation a tendency to see redress through formal procedures such as via HMRC enforcement.

 

[thejuggler]

These companies employ a lot of casual staff who just work match days, borne out by the numbers against some of the clubs.

Lots of opportunity for errors to be made when people are getting paid casual rates. What does and doesn't count as wage also changes so this can affect salary. If you are minimum wage, but it has been decided at a tribunal a deduction was illegal, or the time worked was incorrect it can affect the salary and take it below the NMW levels.

 

[pemma]

These companies employ a lot of casual staff who just work match days, borne out by the numbers against some of the clubs.

Lots of opportunity for errors to be made when people are getting paid casual rates. What does and doesn't count as wage also changes so this can affect salary. If you are minimum wage, but it has been decided at a tribunal a deduction was illegal, or the time worked was incorrect it can affect the salary and take it below the NMW levels.

One common issue is a company pays a salary based on the minimum wage and employees get a monthly payment equal to minimum wage multiplied by the number of hours worked multiplied by 52, divided by 12. The problem with that is there aren't the same number of working days in every year so some years that might end up being slightly more than the minimum wage, others slightly less.

That shouldn't be an issue with casual staff as they are paid for the exact number of hours worked and the employer makes a genuine error e.g. misreading 15 scribbled on a time sheet as 12 or misplacing a timesheet then the employee should notice it and the employer should be willing to correct the error. However, sometimes casual staff aren't aware that they are entitled to holiday pay even if they only do two days work for the business so if they work 15 hours and are given a payment equal to 15 multiplied by the minimum wage, they've been underpaid by a few pounds. As you alluded to there's also an issue if they are paid minimum wage and then made to buy their own uniform or similar.

 

[mildertduck]

It should be noted that companies 2, 4, 6, 8 and 9 all affect only one or two workers, from organisations who will employ a significant number - implying that these could well be errors or anomalies - or even disputes.

The others, however, with 50 or 140 workers indicate a significant issue!

 

[pemma]

It should be noted that companies 2, 4, 6, 8 and 9 all affect only one or two workers, from organisations who will employ a significant number - implying that these could well be errors or anomalies - or even disputes.

The others, however, with 50 or 140 workers indicate a significant issue!

A club permanently having one 'volunteer' or 'unpaid intern' who is actually treated as a worker is still a significant problem.

 

[ComUtoR]

What about heritage railways that use 'volunteers' are their core workforce ? Charities too.

What about 'Apprenticeships' ?

 

[pemma]

What about heritage railways that use 'volunteers' are their core workforce ? Charities too.

Charities have special status. Non-charities can have volunteers or those doing unpaid work experience but they have to meet specific conditions. You could volunteer to drive trains for a heritage railway on days when you're free but if the heritage railway starts telling you what days they want you to work or making you submit formal holiday requests it's moving in to unpaid worker territory

What about 'Apprenticeships' ?

They should include a training element e.g. one day a week in college and four days a week in work with the apprentice wage paid for the day in college as well as the day in work. If Channel 4's Dispatches is to be believed one reason the government isn't cracking down on abuse of apprenticeships is because the Next CEO is a Tory donor and they are one of the main culprits.

 

[Clip]

It should be noted that companies 2, 4, 6, 8 and 9 all affect only one or two workers, from organisations who will employ a significant number - implying that these could well be errors or anomalies - or even disputes.

The others, however, with 50 or 140 workers indicate a significant issue!

The Newcastle Falcons one equates to £6.668 per person so that seems likely a time sheet error as thats roughly 1 hour at minimum wage levels

 

[pemma]

The Newcastle Falcons one equates to £6.668 per person so that seems likely a time sheet error as thats roughly 1 hour at minimum wage levels

Or they applied the change in the minimum wage from the wrong date as doing that could create a shortfall of 33p per person per hour worked.

 

[deltic]

Having worked on a very large staff payroll I am a great believer in the cock up theory when it comes to most of these underpayments - data entry errors, system not set up to increase rate on a person's birthday, no one increasing pay when rate goes up because its doesn't align with annual pay increase day etc. All of these should be picked up by simple checks but often arent. Most errors tended to be for casual and weekly workers who were on variable hours.

There are of course the others who deliberately pay below the minimum wage - my nephew worked for an illegal rate but there were no other jobs in his rural area and he felt he had no choice

 

[kevconnor]

One common issue is a company pays a salary based on the minimum wage and employees get a monthly payment equal to minimum wage multiplied by the number of hours worked multiplied by 52, divided by 12. The problem with that is there aren't the same number of working days in every year so some years that might end up being slightly more than the minimum wage, others slightly less.

You are correct and this is surprisingly quite common. The variation can be as much as nearly £200

However, sometimes casual staff aren't aware that they are entitled to holiday pay

This is an issue of Working time Regs or a contractual claim. If a payment is made for annual leave then it should be clearly identifiable and should be discounted for purposes of calculating NMW compliance. If a person was paid for rolled up holidays then at adult rate of NMW (£7.83 p/h) they should expect to be paid an equivalent of £0.95 p/h for each hour work.

As you alluded to there's also an issue if they are paid minimum wage and then made to buy their own uniform or similar.

This is also a genuine problem, a number of retailer have been caught out by this. Any expenses should not be offset against what is paid. The employee should is still paid at least the rate of NMW after deductions are made (save for some allowed for .

Charities have special status.

Charities to some extent have special status but it is possibly more accurate to say genuine Volunteers for charities have special status. If you are a worker or employee for a charity you will still be covered by NMW.

Non-charities can have volunteers or those doing unpaid work experience but they have to meet specific conditions. You could volunteer to drive trains for a heritage railway on days when you're free but if the heritage railway starts telling you what days they want you to work or making you submit formal holiday requests it's moving in to unpaid worker territory

There are two separate bodies of employment law here, one you are alluding to is about control which relates to if a person is a worker, employee or self-employed and is covered by s.230 ERA1996 and a whole body of case law. However, NMWA 1998 provides a distinct definition of volunteer.

(i) the volunteer must be employed by a charity, a voluntary organisation, an associated fund-raising body (such as a charity shop) or a statutory body (such as a school or hospital); and

(ii) the volunteer must not receive any monetary payment other than actual expenses or reasonably estimated expenses, nor must he or she receive any benefits in kind other than reasonable subsistence or accommodation. (NMWA 1998, s 44(3)).

Having worked on a very large staff payroll I am a great believer in the cock up theory when it comes to most of these underpayments

Also referred to as Hanlon’s Razor “Never attribute to malice that which is adequately explained by stupidity.”

 

[GusB]

Having worked on a very large staff payroll I am a great believer in the cock up theory when it comes to most of these underpayments - data entry errors, system not set up to increase rate on a person's birthday, no one increasing pay when rate goes up because its doesn't align with annual pay increase day etc. All of these should be picked up by simple checks but often arent. Most errors tended to be for casual and weekly workers who were on variable hours.

I'm really annoyed that companies feel they can pay younger staff less simply for being young. I've been a few positions where I've had staff younger than me show me the ropes, yet they get paid less, despite having more experience.

 

[WelshBluebird]

I'm really annoyed that companies feel they can pay younger staff less simply for being young. I've been a few positions where I've had staff younger than me show me the ropes, yet they get paid less, despite having more experience.

Of course, the concept of people able to pay younger staff less just because they are younger is actually in law! First the different levels of minimum wage and now the fact the living wage doesn't apply to those under 25. So I'd say the real blame is on government!

 

[pemma]

This is an issue of Working time Regs or a contractual claim. If a payment is made for annual leave then it should be clearly identifiable and should be discounted for purposes of calculating NMW compliance. If a person was paid for rolled up holidays then at adult rate of NMW (£7.83 p/h) they should expect to be paid an equivalent of £0.95 p/h for each hour work.

'Rolled up holidays' are no longer allowed in new contracts.

 

[pemma]

Having worked on a very large staff payroll I am a great believer in the cock up theory when it comes to most of these underpayments - data entry errors, system not set up to increase rate on a person's birthday, no one increasing pay when rate goes up because its doesn't align with annual pay increase day etc. All of these should be picked up by simple checks but often arent. Most errors tended to be for casual and weekly workers who were on variable hours.

There are of course the others who deliberately pay below the minimum wage - my nephew worked for an illegal rate but there were no other jobs in his rural area and he felt he had no choice

The companies named by HMRC are not ones which made mistakes and then corrected them but ones that didn't notice or ignored the mistakes, possibly even after employees told them that they don't think their pay was calculated correctly.

 

[pemma]

Of course, the concept of people able to pay younger staff less just because they are younger is actually in law! First the different levels of minimum wage and now the fact the living wage doesn't apply to those under 25. So I'd say the real blame is on government!

Indeed. Someone who is 25 who spent months or years not working or studying is entitled to the 'living wage' while someone who is 24 is entitled to 'minimum wage.' I wouldn't be surprised if in some cases that leads to age discrimination against older applicants especially for temporary jobs.

 

[kevconnor]

'Rolled up holidays' are no longer allowed in new contracts.

Whilst not allowed it is still very common practice in many of those industries where NMW compliance is also an issue as there is no real threat for a breach.

The WTR regs don’t allow for awards for injury to feeling and it’s difficult to demonstrate percunary loss for wtr breach.

 

[RJ]

'Rolled up holidays' are no longer allowed in new contracts.

Maybe not, but they can just pay it to you in addition to your hourly rate. I have this arrangement with some zero hours rail replacement jobs I do.

 

[gingerheid]

It was reported in the accounting press a while ago that HMRC were going to be checking the employment situation in companies associated with sports because of concerns associated with high earners (in particular image rights contracts with offshore companies). I wonder if those checks might be the reason for a cluster of employment related issues being found in sports clubs?