In the 14th round of Government naming and shaming, HMRC issued a whopping £1.3M in penalties to employers for breaking minimum wage laws.

In the 14th round of Government naming and shaming, HMRC issued a whopping £1.3M in penalties to employers for breaking minimum wage laws. These employers will, of course, now have to pay the back pay owed. Most employers want to get pay right, but it’s easy to fall foul of this tricky legislation.

The sectors most affected included retail, hairdressing and hospitality. Most of the breaches were relatively small scale yet the impact of naming and shaming can be business critical and leaves a stain on the very hard work put in by business owners. Payroll inaccuracies can occur for many reasons yet have serious ramifications.

The naming and shaming came just before the announcement of increased National Minimum Wage and National Living Wage rates. What’s new is that the Government is getting even stricter.

In line with the Good Work Plan, which was published last December, BEIS will be launching a campaign to raise awareness of the increased rates and to encourage workers to communicate with their employers if they think they are being underpaid.
Business Minister Andrew Griffiths says:

“The world of work is changing and we have set out our plans to give millions of workers enhanced rights to ensure everyone is paid and treated fairly in the workplace.

There are no excuses for short-changing workers. This is an absolute red line for this government and employers who cross it will get caught – not only are they forced to pay back every penny but they are also fined up to 200% of wages owed.
[The] naming round serves as a sharp reminder to employers to get their house in order.”

Extensions to the enforcement regime set out in the Good Work Plan together with new payslip rules, and stricter enforcement of holiday pay calculations mean that employers can no longer afford to avoid the issue and hope enforcement won’t happen to them.

Most conscientious employers will want to know

  1. What the minimum pay rates are
  2. How to handle an HMRC inspection
  3. How to ensure payslips are correct
  4. What deductions can and cannot properly be made
  5. What documentation needs to be kept
  6. How to make sure pay clauses in contracts of employment are accurate

If you’re one of those employers who does their best to comply, then you’ll be pleased to learn we’ve already done some of the heavy lifting for you.

If you would like our free Top Tips for Reviewing the Good Work Plan, or assistance with an HMRC investigation, please do not hesitate to email joan.pettingill@luptonfawcett.law or call 0114 228 3252.

Please click here for further information including current rates.

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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