National Minimum Wage: Avoid Hefty Payroll Fines

HMRC sets a national minimum wage to ensure that everyone is paid and treated fairlIMAGE - employeesy in the workplace.

Employers who pay workers less than the minimum wage not only have to pay back arrears of wages to the worker at current minimum wage rates but also face financial penalties of up to 200% of arrears, capped at £20,000 per worker.

As well as facing financial penalties, those who don’t pay their employees correctly and have payroll arrears of more than £100 are ‘named and shamed’ in a public government list. The list is available online and draws the attention of the national press. The most recent list included nearly 240 employers. £1.44m in back pay was identified for 22,400 workers, with the employers fined additional £1.97m.

The list was topped by Sportswift Limited, trading as Card Factory (failed to pay £430,097.87 to 10,256 workers) and T.J. Morris Limited, trading as Home Bargains, (failed to pay £272,228.44 to 6,743 workers).

Be aware that it isn’t just large companies and big numbers that are named publically. The list includes sports clubs, car washes, care services, newsagents and restaurants – a convenience store was listed as owing £102.19 to one worker.

Low Paying Sectors

HMRC regularly targets sectors for investigation:

– Hospitality: 43 employers named for underpaying 5,726 workers a total of £460,459
– Hairdressing: 19 employers named for underpaying 152 workers a total of £43,938
– Retail: 18 employers named for underpaying 85 workers a total of £27,332

IMAGE - equestrian rosette wining horseAnother group in the spotlight is the equestrian sector. Some riders have been fined more than £30,000 for failing to pay their staff the National Minimum Wage (NMW). Lucy Katan, executive director of the British Grooms Association (BGA) and Equestrian Employers Association (EEA) told Horse & Hound magazine: “Non-compliant employers need to watch out, HMRC is coming to get them and they are putting their businesses at risk. The equestrian industry is not immune and as more and more people become aware [that employers must pay the NMW], more people will go to HMRC and they will investigate.”

What is the Current National Minimum Wage?

Age

– 25 years and over – £7.83

– 21 to 24 years – £7.38

– 18 to 20 years – £5.90

– Under 18 years – £4.20

Plus

– Apprentice – £3.70

(Please note that these rates are correct as of April 2018 and will change in April 2019.)

Are You Paying Your Employees Correctly?

Talk to the friendly team at Spicer & Co. We are proactive payroll experts and cut through the jargon of legislation to explain exactly what’s involved with paying your team the right amount at the right time. Contact us for an initial chat without obligation. We’re here to help.

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