Are you complying with National Minimum Wage regulations?

10 March 2015

The Government has recently ‘named and shamed’ more organisations for failing to pay their workers the national minimum wage. We recommend that all organisations review their pay rates, not only when the minimum wage is increased annually every October.

The Government has recently ‘named and shamed’ more organisations for failing to pay their workers the national minimum wage. This further round has included a number of local businesses from Lincoln and the East Midlands which has served as a stark warning that business owners have to comply with the national minimum wage legislation. Since the new regime was introduced in October 2013 over 150 employers have been named (including multi-national companies) with total arrears of over £316,000 and total penalties of over £111,000.

We recommend that all organisations review their pay rates, not only when the minimum wage is increased annually every October. Errors could be attributed to a number of reasons, from human error to businesses not being able to interpret sometimes complex rules. Employers have a duty to be aware of the different legal rates for the National Minimum Wage (which depends on age) and a failure to do so will mean that businesses not only have to pay back arrears of wages at current minimum wage rates but also face financial penalties of up to £20,000. In the most serious cases employers can be prosecuted but organisations should also consider reputational risk.

With further investigations ongoing and the national minimum wage rate forming part of manifestos ahead of the General Election, this topic will continue to get headlines. Our specialist Employment Department at Wilkin Chapman LLP are here to advise businesses and we encourage those with any questions to call to speak to a member of the team at our offices across Lincolnshire and East Yorkshire.

 


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