“She only makes the tea” – A good excuse not to pay National Minimum Wage?

The Government has released a list of the 10 worst and bizarre excuses for not paying National Minimum Wage (NMW).  NMW is the minimum pay per hour most workers are entitled to by law and it is age dependent.  Here’s the list:

  1. The employee wasn’t a good worker so I didn’t think they deserved to be paid the National Minimum Wage.
  2. It’s part of UK culture not to pay young workers for the first 3 months as they have to prove their ‘worth’ first.
  3. I thought it was ok to pay foreign workers below the National Minimum Wage as they aren’t British and therefore don’t have the right to be paid it.
  4. She doesn’t deserve the National Minimum Wage because she only makes the teas and sweeps the floors.
  5. I’ve got an agreement with my workers that I won’t pay them the National Minimum Wage; they understand and they even signed a contract to this effect.
  6. My accountant and I speak a different language – he doesn’t understand me and that’s why he doesn’t pay my workers the correct wages.
  7. My workers like to think of themselves as being self-employed and the National Minimum Wage doesn’t apply to people who work for themselves.
  8. My workers are often just on standby when there are no customers in the shop; I only pay them for when they’re actually serving someone.
  9. My employee is still learning so they aren’t entitled to the National Minimum Wage.
  10. The National Minimum Wage doesn’t apply to my business.

There is no legal way of getting out of paying NMW; it is required by law.  Whether you have staff “on standby when there are no customers in the shop” or they “only make the tea” you must ensure you stick the NMW.

Increases are due on 1 April 2017:

Age

Rate

25+ £7.50
21-24 £7.05
18-20 £5.60
16-17 £4.05
Apprentice *£3.50

*Applies to apprentices under 19 and those aged 19 or over who are in their first year.

 

What happens if I don’t pay National Minimum Wage?

The list above has been published today to coincide with a new awareness campaign to encourage workers to check their pay to ensure they are receiving at least the statutory minimum ahead of the wages rising on 1 April 2017.  The £1.7 million campaign aims to make sure workers are being paid at least the NMW depending on their age.

A worker can notify HMRC who will investigate the complaint. If HMRC find that an employer hasn’t paid at least the National Minimum Wage, the employer will be required to pay the arrears plus a penalty for not paying the correct rate of pay to the worker.

This calculator can help you make sure you’re paying National Minimum Wage

https://www.gov.uk/minimum-wage-calculator-employers

Penalties for failure to comply with paying the National Living Wage

The penalty for non-payment is 200% of the amount owed, unless the arrears are paid within 14 days.

The maximum fine for non-payment is £20,000 per worker. However, employers who fail to pay will be banned from being a company director for up to 15 years.

So it is imperative that you ensure you are complying with the current National Minimum Wage rates for all workers according to their age.

If you are found by HMRC to be underpaying workers and you are issued with a Notice of Underpayment, you will be named and shamed.  197 companies were named and shamed on 11th August 2016 https://www.gov.uk/government/news/largest-ever-list-of-national-minimum-wage-offenders-published

If you require advice regarding National Minimum Wage, National Living Wage or any other statutory minimum rates, we can HELP you. Contact us today to speak to a HR consultant on 01543 431 050 or email hattie@helpgb.com.

This post is in: Employment Law Blogs, Featured, General, Honest Employment Law Practice, News and New Legislation