The introduction of the National Living Wage on 1 April is sure to have a big impact on the food and drink industry, but that is not the only change which employers are having to factor into their plans. In a sector which has traditionally relied heavily on both casual labour and overseas workers, a crackdown by HMRC on both of these could lead to the unwary getting a nasty surprise.
The ability to keep it flexible through the use of casual labour has been a real benefit to food and drink businesses, but unsurprisingly HMRC is rather less keen, because unlike workers on full-time contracts, keeping track of pensions, tax and national insurance is inherently more difficult to do for workers who are only around for a short period of time.
Because of this, we are seeing a crackdown on casual contracts, and the administration burden is increasingly falling on employers. It’s not just the National Living Wage; permanent employees must be offered a pension, their national insurance contributions must be collected and paid, and they must have proper contracts of employment. Failure to do this can result in draconian penalties.
On top of this, employers are increasingly being forced to become de facto immigration officers, with the burden of ensuring all staff are entitled to work in the UK being shouldered once again by the businesses providing work.
There really is no way out of these responsibilities, and understanding what you are liable for is more important than ever. For many small-scale food producers, keeping up with the ever-changing rules and regulations is extremely onerous, and more and more are seeking to outsource their whole HR and payroll function (although bear in mind you as the employer are still legally liable, so it’s important to pick the right provider).
Of course, a good external advisor will not just take care of the legal necessities, vital though these are. They should also be proactive in helping you find the most efficient way of providing your workforce needs, for example helping you understand that employing younger workers can be advantageous, both for cost reasons (there are national insurance incentives, and the National Living Wage is only applicable to workers aged 25 or more), and because there are grants and employment allowances available for those who take on younger workers.
The days of casual (in every sense) employment have disappeared. Even the smallest artisan producer now has to take responsibility for making sure they are following the rules – just one more burden for a sector which already has its fair share of challenges.
If you have any questions please don't hesitate to contact me.
You may also find it beneficial to talk to Gemma Chapman
, our HR consultant who can help you with some of the above issues.