The government has revealed ten of the most bizarre excuses used by unscrupulous business owners who have been found to have underpaid workers the National Minimum Wage (NMW).
These employers used excuses such as ‘only wanting to pay staff when there are customers to serve and believing it was acceptable to underpay workers until they had ‘proved’ themselves’.
The government has launched an awareness campaign to encourage workers to check their pay to ensure they are receiving at least the statutory minimum ahead of the NMW and National Living Wage (NLW) increases on 1 April 2017.
Employers need to ensure they are paying their employees at least the NMW and NLW.
| Rate from 1 October 2016 | Rate from 1 April 2017 | |
| NLW for workers aged 25 and over (introduced and applies from 1 April 2016) | £7.20 | £7.50 |
| the main rate for workers aged 21-24 | £6.95 | £7.05 |
| the 18-20 rate | £5.55 | £5.60 |
| the 16-17 rate for workers above school leaving age but under 18 | £4.00 | £4.05 |
| the apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship | £3.40 | £3.50 |
This will be the second increase in six months for the NMW rates. Going forward the NMW and NLW rates will both be reviewed annually in April.
In a recent article in the Employer Bulletin, HMRC cite common errors:
- not paying the right rate, perhaps missing an employee’s birthday,
- making deductions from wages which reduce the employee’s pay below the NMW/NLW rate,
- including top ups to pay that do not qualify for NMW/NLW,
- failure to classify workers correctly, so treating them as interns volunteers or self employed and
- failure to include all the time a worker is working, for example time spent shutting up shop or waiting to clear security.
What are the penalties for non-compliance?
The penalties imposed on employers that are in breach of the minimum wage legislation are 200% of arrears owed to workers. The maximum penalty is £20,000 per worker. The penalty is reduced by 50% if the unpaid wages and the penalty are paid within 14 days. HMRC also name and shame employers who are penalised.
If you would like help with payroll issues please contact our Payroll Team on 01246 559955.
Internet link: GOV.UK NMW news
Tags: Payroll
