Are you aware of your responsibilities to pay the National Minimum Wage?
Shortfalls in national minimum wage (NMW) payments hit a record £10.9m last year, affecting close to 100,000 employees, the Government has revealed. The Government has introduced tougher penalties for non-compliance of the NMW in April last year, with a record £10.9m in arrears, for 98,000 workers, identified by HMRC last year.
Underpayments occurring since April 2016 have been subject to a penalty of 200% of the value of the arrears, capped at £20,000 per worker. Financial resources available for enforcement are also being increased – from £20m in 2016-17 to £25.3m in 2017-18.
It could be that employers understands the law, but ignore it and exploit their workers or the employer doesn’t fully understand the legal requirements but this is not the first time NMW underpayments have been brought to light.
British workers lose almost £3bn each year in unpaid wages and holiday. Some of the country’s best-known retailers have been caught out by failing to pay staff the correct wage, including John Lewis. The retailer announced that it had to restate its profits to the tune of £36m after it breached NMW laws, blaming the mishap on a payroll error – more specifically, its pay averaging practice, which aims to make sure staff take home the same pay each month regardless of the precise number of hours they worked in that period.
Tesco revealed that it had paid staff less than the NMW in March, citing an error that occurred while it was introducing its new payroll system, which led to 140,000 of the supermarket’s workers being short-changed almost £10m between them.
The NMW currently stands at £7.50 per hour for workers over 25.