Nearly 180 employers have been named and shamed for non-payment of the National Minimum Wage.
It is against the law to pay eligible workers less than the National Minimum Wage or National Living Wage (NMW) and a worker who believes they are being underpaid has the right to complain to their employer as well as to HMRC, who can investigate the complaint.
One of the ways of enforcement the HMRC use is a “naming and shaming” scheme where the Department for Business, Energy & Industrial Strategy (BEIS) release a list of employers who have broken minimum wage law.
Today nearly 180 employers were named and shamed, mainly small to medium sized employers. The sectors with the most underpayments were hospitality, hairdressing and retail.
Amongst the larger, well recognised employers were Karen Millen, Wagamama and TGI Fridays who were “named and shamed” and fined due to the rules on staff uniforms. This confirms that if you, as an employer, require your staff to wear a specific uniform you need to take into account the cost of the uniform in relation to their salary. If you deduct the uniform cost or require staff to purchase such items and as a consequence their salary is not above the NMW threshold then you could be “named and shamed”, fined and have to pay back the underpayments. In order to avoid this employers could:
- Buy the uniform and hand this out to staff;
- Give staff a lump sum staff uniform allowance;
- Increase hourly rates above the minimum wage to take into account the cost of the uniform or;
- Allow workers to wear their own clothes.
The publication of this list comes ahead of the next NMW rate rise on 1 April 2018 which includes a record rise of 5.7% for apprentices in their first year of their apprenticeship and those under 19 years of age.
Increases
The National Living Wage and the National Minimum Wage are reviewed and increased at the same time. The changes are implemented in April every year.
From 1 April 2018, new rates will come into force as follows:
- The National Living Wage for workers aged 25 or older will increase from £7.50 to £7.83 per hour.
- The rate for workers aged 21 to 24 will increase from £7.05 to £7.38 per hour.
- The development rate for workers aged 18 to 20 will increase from £5.60 to £5.90 per hour.
- The young workers rate (non-apprentices aged under 18) will increase from £4.05 to £4.20 per hour.
- The apprenticeship rate will increase from £3.50 to £3.70 per hour.
These new pay rates will only affect someone’s pay from the first full pay reference period after 1 April. A pay reference period is usually set by how often someone is paid. For example, if someone’s pay reference period runs from 25 March to 24 April, the increased rates will not apply to that pay reference period but will take effect for that running from 25 April to 24 May, because this is the first full pay reference period after 1 April.
On 5 March 2018 the Low Pay Commission commenced a consultation to seek views on the NMW rates and the rates to apply from April 2019. The consultation includes whether to have a higher minimum wage for hours not guaranteed by an individual’s contract, for example, for zero hours contract workers. The consultation ends in October 2018. The government usually increases the National Minimum Wage and National Living Wage in accordance with the Low Pay Commission’s recommendations.
Payslips
Another way the Government is proposing to make it easier for workers to try and ascertain if they are being paid the minimum wage was announced in its “Good Work plan” on 7 February 2018. The Government has proposed that all workers will have a new right to a payslip and for those paid by the hour, a payslip stating the hours they have worked.
Tricky areas
Payment of the NMW can pose difficulties in some particular areas, including in relation to employees who travel between appointments as part of their working day or those who are required to “sleep in” at their employer’s premises. The penalties for not paying the NMW are severe and the suspension of penalties in respect of “sleep-in” shifts was lifted on 1 November 2017, subject to a new voluntary Social Care Compliance Scheme (SCCS). If you have any concerns that your business may not be compliant, we would strongly encourage you to take urgent advice.
Our employment solicitors and HR advisors work in partnership with organisations to improve their HR practices and advise on employment issues. To discuss this article or any other HR issue call 01392 210700 or employment@stephens-scown.co.uk.