Be prepared for a NERA employment inspection
Caroline McEnery reveals the crucial facts retailers should know about the National Employment Rights Anuthority (NERA)
Print14 July 2010
The director of NERA, Ger Deering, stated in an Irish Times article on 19 January, 2009, that NERA will be focusing on completing audits in the retail and hotel sectors in 2010. He also confirmed that prosecutions taken against employers by NERA had increased by more than 50% in 2009. The number of breaches detected up to 11 December, 2009, was 4,033. Prosecution may lead to significant penalties for employers with fines ranging from €1,900 to €15,000 depending on the breach of employment rights legislation. The following are examples of the legal obligations of employers that can result in fines if not complied with:
- All employees are legally entitled to a copy of their contract of employment within two months of commencing employment. Are your staff contracts up to date covering all relevant legislation? Are the contracts given to new employees within the timeframe?
- All employees must receive a written notice of the organisation’s dismissal policy and procedures within 28 days of commencing employment. Do you have a comprehensive policy and procedures manual for employees? Do you have an acceptance process signed off by your employees?
- Employees must be paid the correct rate of pay including the premium due in relation to Sunday work and overtime. Do you have records of this?
- All hours worked by employees must be recorded by employers. How are you currently doing this? Is there a more efficient process?
- All employees must receive their correct break entitlements. Is this being recorded and logged in your business?
- Employees under the age of 18. If you have employees under the age of 18 are they receiving the correct rate of pay and breaks?
NERA Inspectors may enter your premises at any reasonable time, either announced or unannounced. They can demand to see and inspect employee records and take copies if required. Inspectors may also interview and collect information from any relevant person if they so wish. The following documentation is typically what a NERA inspector will look at:
- Employer registration number with the Revenue Commissioners
- Full name, address and PPS number for each employee (full-time and part-time)
- Terms of employment for each employee
- Payroll details (gross to net, rate per hour, overtime, deductions, shift and other premiums and allowances, commissions and bonuses, service charges, etc.)
- Copies of payslips
- Employees’ job classification
- Dates of commencement and where relevant, termination of employment
- Hours of work for each employee (including starting and finishing times, meal breaks and rest periods).
- Register of employees under 18 years of age
- Work Permits for relevant employees
- Holidays and public holiday entitlements received by each employee
- Any documentation necessary to demonstrate compliance with employment rights legislation
- Additional records may be required to be held depending on the sector/business involved and the legislation under which the inspection is being conducted eg the retail JLC.
Following an inspection, the employer will receive written notice of the outcome of the inspection. If a breach has been identified, NERA may;
Request the employer correct the breach.
Reimburse back pay to employees if required.
Refer employer directly to legal services for prosecution, depending on the offence.
Complete another inspection.
Impose fines in association with the breach.
Underpayment penalties
In cases of underpaying employees, the employer must send confirmation of compliance in writing and show evidence that the employee has been fully reimbursed for the underpayment within one month. Arrears of wages is a significant area for NERA to investigate and in 2009, the amount of unpaid wages following NERA inspections amounted to €2,299,681 (up to 11 December, 2009).
Other functions of NERA
It is important to note that not only can NERA conduct inspections relating to employment rights, they also have the authority to conduct joint inspections with the Revenue Commissioners, the Department of Social & Family Affairs and the Garda National Immigration Bureau.
To ensure a successful outcome of NERA inspections and to avoid negative publicity, it is essential that employers ensure they are fully compliant with all employment rights legislation. HR & Business Solutions conduct NERA audits for employers, ensuring they are legally compliant thus eliminating the risk of breaches within the business. As well, H&R Business Solutions can provide employers with a detailed corrective action plan and relevant templates tailored to specific business needs.
Caroline McEnery of HR & Business Solutions can be contacted for a free consultation at 087 9694837 or by e-mailing caroline@hrbusinesssolutions.ie. Caroline has over 15 years experience working with the Kerry Group and the Garvey Group and can offer you practical advice to help you maximise your people.
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