Are you aware of your employer obligation to pay the National Minimum Wage?

 

If you have answered NO….

Aamilah Begum for

MAYFLOWER SOLICITORS

…there are repercussions for failing to pay the National Minimum Wage (NMW), which could result in hefty financial penalty fines, naming and shaming and in some cases prosecution!!!!!

 

 

 

Government publishes a record number of offending employers named and shamed for underpaying

 

In February 2017, we see the largest list of employers named and shamed for failing to pay their workers the National Minimum Wage.  In excess of 350 employers have failed to pay their workers the legal minimum wage and have consequently been publicly named.  The list includes a high number of retailers, care homes, hotels and hair salons.

Between them, the employers have been issued with penalty fines from HMRC of nearly £800,000.  HMRC have also recovered arrears of around £1 million in underpayment for more than 15,500 of the UK’s lowest paid workers.

 

HMRC’s Targets

The government introduced the Naming and Shaming scheme as a deterrent in October 2013.  Since the scheme was introduced, over 687 employers have been named and shamed, with total arrears of more than £3.5 million.

In August 2016 Business Minister Margot James said:

“This government is determined to build an economy that works for everyone, not just the privileged few.

That means making sure everyone gets paid the wages they are owed – including our new, higher, National Living Wage. It is not acceptable that some employers fail to pay at least the minimum wage their workers are entitled to.

So we’ll continue to crack down on those who ignore the law, including by naming and shaming them.”

 

With the introduction of the National Living Wage for workers aged 25 in April 2016, employees previously working full time on the National Minimum Wage expect to see a pay rise of more than £900 a year.  As for workers under the age of 25, the National Minimum Wage still applies.

The responsibility and duty lies with an employer to make sure they are aware of the different minimum wage rates, depending on the circumstances of their workers.  An employer must also ensure all eligible workers are paid at least the minimum rate they are entitled to.

The government is set and determined to enforce the National Living Wage equally and robustly alongside the National Minimum Wage.

Businesses or employees who would like to find out more about the National Minimum Wage should visit www.mayflowersolicitors.com.

 

Employers Duty

Employers have a duty to be aware of the different legal rates for the National Minimum Wage.

  1. The current minimum wage rates are:
  • National Living Wage (25 years and over) – £7.20 per hour
  • Adult rate of National Minimum Wage (21 years and over) – £6.70 per hour
    • 18 to 20 year olds – £5.30 per hour
    • 16 to 17 year olds – £3.87 per hour
    • *Apprentice rate – £3.30 per hour

*The apprentice rate applies to apprentices aged 16 to 18 years and those aged 19 years and over who are in their first year. All other apprentices are entitled to the National Minimum Wage rate for their age.

  1. Compliance
  • The government shall take the necessary and effective enforcement action against offending employers as part of its commitment to increasing compliance with minimum wage legislation. Everyone who is entitled to the minimum wage should receive it.
  • Not only will employers be faced with hefty financial penalties of up to £20,000 per worker where less than the minimum wage is paid. They will also have to pay back arrears of wages at current minimum wage rates.
  • In the most serious cases employers can be prosecuted.
  1. Naming and Shaming
  • From 1 October 2013 the government revised the Naming and Shaming scheme to make it simpler to name and shame employers who break the law.
  • Under this scheme the government will name all employers that have been issued with a Notice of Underpayment (NoU) unless employers meet one of the exceptional criteria or have arrears of £100 or less.

 

 

 

  1. Appealing a Notice of Underpayment (NoU)
  • Employers will have 28 days to appeal to HMRC against the NoU (this notice sets out the owed wages to be paid by the employer together with the penalty for not complying with minimum wage law).
  • Failure to appeal or unsuccessfully appeal against the NoU, the government will consider the employer for naming.
  • The employer then has 14 days to make representations to the government, with an explanation as to whether or not they meet any of the exceptional criteria set out by the government.
  • Failing all of the above the government will name the employer via a press release under this scheme.

The UK saw the government’s National Living Wage become law on 1 April 2016.  Workers aged 25 years or over who are not in the first year of an apprenticeship are legally entitled to at least £7.20 per hour. Employers will be responsible for ensuring they are paying their staff correctly. The National Living Wage will be enforced in the same way as the current National Minimum Wage.

As with any law, breaches deliberate or not, carry consequences.  This can result in hefty financial costs and damage to reputability.  For further advice and help on the National Minimum Wage contact Mayflower solicitors.  We also help with submitting appeals and representation in response to Notice of Underpayment (NoU).

 

Author:  Aamilah Begum