By Claire Rolston, Solicitor, Director, CLR Law
Government names and shames
The government issued a press release in February naming and shaming those businesses who had not paid the National Minimum Wage (the “NMW”). In total 359 businesses were named including Debenhams, Subway, Lloyds Pharmacy and Heron Foods. In the case of Debenhams, an accounting error had led to nearly £135,000 having to be repaid to 11,858 workers.
The press release stated that over 15,500 workers had received back pay following HMRC investigations and that penalties of over £800,000 had been imposed.
Who has to pay the NMW?
All employers must pay the NMW to their workers. This covers employees and the broader category of individuals providing personal service who are not in business on their own account. There is also an apprentice rate for those under 19 years of age or over 19 but in their first year of apprenticeship.
What counts?
Basic pay, bonuses, commission, piece work payments and the accommodation allowance all count towards the NMW but tips and most benefits in kind do not.
NMW rates
The applicable rate depends on the worker’s age. From 1 April 2017 the hourly rates are as follows:
National Living Wage –
Over 25 – £7.50 (from £7.20)
Standard Adult Rate –
21 24 – £7.05 (from £6.95)
Development Rate –
18 20 – £5.60 (from £5.55)
Young Workers Rate –
Under 18* – £4.05 (from £4.00)
Apprentice Rate – £3.50 (from £3.40)
*but above compulsory school age.
Enforcement
HMRC will investigate compliance and can impose penalties as well as requiring back pay to be paid. Individuals can also bring civil claims.
How to comply
To ensure you comply with the NMW, you should:
familiarise yourself with the NMW provisions and rates;
keep accurate records of pay and hours for each worker which should be kept for a minimum of 6 years;
properly investigate any grievance or informal complaint; and
take advice in respect of individuals working on-call and/or sleeping at their place of work.
