The government has released the latest list naming and shaming nearly 191 employers who underpaid the National Minimum Wage and National Living Wage (NMW). The breaches took place between 2011 and 2018. Named employers have since been made to pay back what they owed and were fined an additional £3.2 million.
The list contains some large household names, showing that employers of all sizes can find this a tricky area to get to grips with.
Common Areas Employers Should Watch Out For
So, what were some of the more common areas where mistakes were identified?
1. Failing to pay the uprated minimum wage
Tip: Ensure that you are up to date on the current NMW rates. Whilst most employers are aware that these usually change every April, this year there was also a change to the age at which the National Living Wage became payable. Information regarding this and the current NMW rates can be found in an earlier Legal Update here: https://kingfisherps.co.uk/minimum-wage-news/
2. Taking deductions from wages for costs such as uniforms
Tip: Remember that deductions in respect of expenditure in connection with employment such as the purchase of uniforms will reduce the amount of the total earnings for NMW purposes. The employee must still be left with at least the NMW after these deductions have been taken into account.
3. Underpaying apprentices
Tip: Keep an eye on the age of your apprentices; they may become entitled to a higher rate of NMW pay during their apprenticeship. The apprentice NMW rate is for apprentices under 19. It can be paid to those who are aged 19 and over only if they are in the first 12 months of their apprenticeship.
4. Misusing the accommodation offset
Tip: There are strict rules about how the accommodation offset operates and a maximum amount that can count towards the NMW. If your organisation makes use of the accommodation offset, you may wish to review your practice to ensure you are complying with the law.
It is important to ensure that you pay workers in your organisation correctly, not doing so can be costly. If you pay workers less than the NMW you have to pay back arrears of wages to the worker at current minimum wage rates and face financial penalties of up to 200% of arrears, capped at £20,000 per worker.
If you have an employment law matter you would like assistance with, please do not hesitate to contact Kingfisher Professional Services Ltd as we are happy to help.