Employees Clocked Hours versus Contracted Hours

[J_A_M_E_S]

A little advice please . . .

We are having 'ongoing discussions' with HMRC regading National Minimum/Living Wage payments to staff and the difference between clocked hours, and contracted hours.

Our current way of working is that each member of hourly paid staff (manufacturing) is paid their contacted hours (let's ignore any agreed overtime for now as this very rarely happens).
So they are paid Mon-Fri, 9am-5pm.
Staff arrive on site and have rest areas where they can congregate before starting work at 9pm, so it is not unusual for staff to clock in at 8:55am (when they pass the clock machine on their way in), but not start work until 9am (when they might not pass the machine to get to their specific department).

Staff understand that they do not get paid for the additional 5mins - they get paid their contracted hours.

HMRC is stating that:
Under NMW legislation, timed workers must be paid from the exact time(s) they sign-in to the exact time(s) they sign-out from work, even if not performing work.’

Our current standpoint is that surely it is not reasonable to expect every member of staff to clock in at exactly 9am and out at exactly 5pm?

 

[Newchodge]

If your workers are contracted to be paid from 9 to 5, AND you require that they clock on and off AND they have to be at the clock before 9 and after 5 to achieve this, HMRC is right. You should require staff to be at the time clock at 9am and to leave the timeclock by 5pm if you are only paying them from 9 to 5.

The problem is you requiring them to use a time clock.

 

[J_A_M_E_S]

If your workers are contracted to be paid from 9 to 5, AND you require that they clock on and off AND they have to be at the clock before 9 and after 5 to achieve this, HMRC is right. You should require staff to be at the time clock at 9am and to leave the timeclock by 5pm if you are only paying them from 9 to 5.

The problem is you requiring them to use a time clock.

Thank you - I appreciate your reply & explanation.

So are you saying that we could not use the clock machine? 99% of the staff work their regular contracted hours every day (except for authorised absence / holidays) & we don't have any wage queries as a rule.

Could not using the clock machine cause any other issues that you can think of?
(We already keep a record of who is on site at all times for Fire Alarms/Emergency evacuations, as an example).

 

[Newchodge]

Thank you - I appreciate your reply & explanation.

So are you saying that we could not use the clock machine? 99% of the staff work their regular contracted hours every day (except for authorised absence / holidays) & we don't have any wage queries as a rule.

Could not using the clock machine cause any other issues that you can think of?
(We already keep a record of who is on site at all times for Fire Alarms/Emergnecy evacuations, as an example).

Only you really know what you use it for and whether you really need it.

Options:

1. Carry on as now but pay staff by the clock times, not the contract times. This could bring the issue of staff clocking in 15 minutes early or out late.

2. Tell staff they are not required to be on site until 9 and cannot clock on before 9, and must have clocked out by 5. This could bring the issue of reduced working hours.

3. Do away with the clock at a fixed point and have a system, perhaps on smart phones, where people clock on as they arrive at their workstation. Pay by the clocked times. this may be costly.

4. Do away with time recording. There may be issues of knowing when staff are absent. Only you know how you use it. How do you "already keep a record of who is on site at all times for Fire Alarms/Emergnecy evacuations, as an example".

 

[J_A_M_E_S]

Thank you for again explaining some possible options.

Re: point 4; we have a staff list for each department which is updated each day by HR for planned absences and who is also kept updated if anyone leaves site for any reason (or returns after an appointment).

 

[Newchodge]

Thank you for again explaining some possible options.

Re: point 4; we have a staff list for each department which is updated each day by HR for planned absences and who is also kept updated if anyone leaves site for any reason (or returns after an appointment).

How do you know if someone just does not turn up?

 

[fisicx]

I remember queuing to clock out. Everyone would wait until 4.57 and then a mad rush. 4.57 was the earliest we could clock out without penalties.

Was the same the morning, as long as you clocked in by 9.03 you were paid from 9.

What it means was staff stopped work around 4.50, logged off or shutdown, got coats and bags and then wandered down to the timeclocks.

Production improved when we stopped clocking in and out.

 

[FreddyG]

Production improved when we stopped clocking in and out.

We can't have that! That means we would have to trust and treat our employees with respect.

 

[MikeJ]

How about paying more than NMW?

 

[J_A_M_E_S]

How do you know if someone just does not turn up?

I appreciate your right to question this, but for the purposes of this discussion, it's veering off topic. I'm satisfied that we have a system in place (not fully explained by me) that has been 'signed off' by various respected ethical audits and industry audits over the last few years, as well as our HR insurers and HSE.

 

[J_A_M_E_S]

How about paying more than NMW?

I never said we didn't.

This is related to whether staff should receive payment for the additional minutes that they have clocked and not actually worked, whether that's £13/hr, or £25/hr, or whatever.

It's HMRC that are quoting that this falls under NMW Legislation.

 

[BeauLacey]

2018 we had a successful NMW inspection and this was never an issue for those paid via hourly rate. We operate how you do for those on hrly rate.

 

[Newchodge]

I never said we didn't.

This is related to whether staff should receive payment for the additional minutes that they have clocked and not actually worked, whether that's £13/hr, or £25/hr, or whatever.

It's HMRC that are quoting that this falls under NMW Legislation.

This is ONLY an issue if failing to pay those additional minutes puts people below NMW. If you are paying enough so that it makes no difference, HMRC will not be interested. As long as staff receive at least NMW for all hours and minutes closked, it is no-one's business but yours and the staffs'