Records, Evidence, Powers & Offences: Evidence; clarifying information regarding the employer
The legislation that applies to this page is as follows:
* National Minimum Wage Act 1998, section 14
When obtaining evidence from employers (NMWM12060) it is always appropriate for NMW Officers to retain an awareness of issues relating to the employer which may be required or helpful should enforcement action be necessary. When noting issues relating to the position of the employer it is important that matters are clarified at the earliest opportunity and certainly prior to any consideration regarding enforcement action.
Issues which the NMW Officer should be alert to include;
Business changing hands and possible TUPE transfer
The NMW Officer should obtain details of any party who has operated the business during the period under investigation. Details of any transfers should be carefully noted, including dates of business transfers. It will be helpful if the NMW Officer reviews and obtains copies of any documentation relating to the transfer of a business from one party to another.
Change in partners within a partnership
The NMW Officer should record details of any changes within a partnership as it is possible that any arrears which may arise will need to be attributed to the correct partners at the time of those arrears. A careful note of the identity details of all partners, including their NI numbers, including “sleeping” or “silent” partners and the periods of their partnership should be recorded. Details or copies of any partnership agreements should be obtained and where partners have left the business there should be evidence of suitable notice of their leaving.
Change in office holders, such as directors of limited companies
The NMW Officer should record details of any changes of any office holders of limited companies. A change in office holders does not itself change the legal entity which is the limited company. Therefore, the limited company will remain the liable party for arrears. However it will avoid potential confusion if an investigation has an understanding of who is running the business at particular times.
Change in members of limited liability partnerships
The NMW Officer should record details of any changes of any members of limited liability partnerships. A change in members does not itself change the legal entity which is the limited liability partnership. Therefore, the limited liability partnership will remain the liable party for arrears. However it will avoid potential confusion if an investigation has an understanding of who is running the business at particular times.
Striking-off action (limited companies and limited liability partnerships)
The NMW Officer should record details of any proposed striking-off action. In such a case, HMRC should apply to Companies House to object to the striking-off action so that the NMW Officer can continue their investigation. If Companies House strikes off the company, the investigation must cease as the company will not exist as a legal entity.
Insolvency or bankruptcy action
The NMW Officer should obtain the dates, nature and parties of any insolvency, liquidation or bankruptcy action. Often in such circumstances a person will be appointed to oversee the action and so will be a source for information and potentially the recipient of any notice of underpayment. In these cases, NMW Officer will need to establish the whereabouts of any records which in liquidation and bankruptcy should be held by the Liquidator or Trustee in order to determine whether at least national minimum wage has been paid. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Notable assets or liabilities of employer
Where an employer provides information regarding notable assets and/or liabilities, the details should be recorded as such information may be helpful when considering potential enforcement action.