The Government continues to name and shame businesses who fail to pay their workers the National Minimum Wage. The newsletter below takes a look at research into employees’ and employers’ understanding of the changes to National Minimum Wage.

Businesses must pay their employees the National Minimum Wage. The rate per hour is determined by the employee’s age and whether or not they are an apprentice. The rate currently stands at £7.50 for over 25s, £7.05 for over 21s, £5.60 for 18 to 20-year-olds, £4.05 for under 18s and £3.50 for apprentices. Research shows that a significant number of employers are failing to pay their staff the National Minimum Wage and that consequently many employers risk being publicly named and shamed by the Government. Employers who flout the National Minimum Wage Regulations also face hefty financial penalties.

Research into government statistics from the Department for Business, Innovation and Skills shows that apprentices and employees aged 18 and under are most likely to not be paid the minimum legal requirement.

Young people are not being paid National Minimum Wage

Groups aged under 18 or working as apprentices are least likely to be paid the National Minimum Wage, despite it being against the law to do otherwise. Businesses of various sizes admit to not paying their staff correctly, with 23 (4.6%) of 500 employers underpaying those 18 and under, while 20 (4%) of the 500 employers are not paying apprentices correctly.

Employer’s attitudes towards paying National Minimum Wage highlighted that half of employers do so because it is the law, while the other half do so because they think it is fair. Almost 10% of companies admit to paying National Minimum Wage because they have to, but don’t like doing it, while 17% say it’s the minimum they can afford (although they would like to pay more).

Employers ‘not interested’ in regulations

Paying employees a minimum wage is a requirement of UK law and businesses not adhering to the legislation can face costly penalties. At the moment, employers who breach the National Minimum Wage regulations risk having to pay back historic arrears of wages at the current National Minimum Wage rates, as well as paying an additional penalty of up to £20,000 per underpaid worker. The majority (73.8%) of employers surveyed were either unaware that there is a penalty or did not know how much the potential fine could be.

Facing a penalty for not paying National Minimum Wage can also have a significant and damaging impact on an employer’s brand and reputation.

What can be done?

We have a dedicated National Minimum Wage team which is regularly called upon by businesses across a wide range of sectors (including Care Homes, Domiciliary Care, Education and Manufacturing) in order to ensure compliance with the existing National Minimum Wage Regulations and reduce the risk of businesses being exposed to large claims for back pay together with costly fines.

We are also able to assist businesses in circumstances where they are already under investigation, in relation to alleged breaches of the National Minimum Wage Regulations, and have successfully assisted businesses in defending themselves against allegations that they have failed to pay or underpaid the National Minimum Wage. Experience has taught us that in these situations the sooner the employer makes contact with us in order to take professional advice the better and for that reason we have set up a National Minimum Wage hotline which can be accessed 24/7 on 07971520407 without any obligation.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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