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Sports clubs: playing fair with national minimum wage

Every few months, the government releases a list of employers who have failed to pay their employees the national minimum wage (NMW).

The most recent round of naming and shaming has revealed that no less than ten professional sports clubs have fallen foul of the NMW legislation - and this isn't a new trend. Previous lists have demonstrated a clear intention by HMRC to shine a spotlight on any clubs considered to be short-changing employees.

It is worth noting that the majority of employers are not intentional culprits when it comes to NMW violations. Rather, it is the various complexities in the legislation that tend to catch employers out, particularly in the case of atypical working arrangements. And it isn't just smaller clubs which experience issues; many of the employers named and shamed are established household names. Bristol City Football Club, which features on the latest list, has explained that its inclusion is due to a failure to pay some of its academy players for travel time to away fixtures. Other clubs previously named and shamed, such as St Helen's rugby club, have cited misunderstandings regarding the payment of casual staff, including participation in training sessions, as the reason for their failures.

There are also those employers who seek to implement initiatives for staff which inadvertently breach the NMW provisions. Stoke City Football Club was one such employer named and shamed by the government earlier this year. The club explained that their issue related to deductions from employees' pay for items (such as merchandise and tickets) purchased from the club. In the event that employees had paid cash directly for these items, there would not have been an issue; it was the practice of making deductions that led to employees' pay falling below the NMW threshold.

With all of these factors in play, it is easy to see how mistakes can creep in. With the significant potential for reputational damage and fines (and criminal lability in the most serious cases), clubs would be wise to review this area as a priority. HMRC's current enforcement strategy states that it will not allow self-correction once it has contacted an employer to initiate an investigation. There are, however, proactive steps which clubs can take to audit their pay practices and reduce the likelihood of any breaches, before HMRC comes calling.

The following are key areas which it would be useful for a club NMW pay audit to address:

  • Types of workers - are academy players, casual workers and other atypical staff being paid consistently and correctly?
  • Pay records - are these comprehensive enough and do they reflect the different rates payable to individual members of staff, including the national living wage?
  • Reference period - are rates of pay, when calculated by reference to the correct pay reference period (for example, monthly or weekly), NMW compliant?
  • Working time - is this being assessed correctly to include things like travel time?
  • Deductions - do any practices around deductions run the risk of NMW breaches?

We are able to provide tailored advice and support in relation to all aspects of NMW compliance and pay audits. If you would like to explore this further, then please do not hesitate to contact us.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

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