Avoiding National Minimum Wage naming and shaming

July saw the second round of NMW (National Minimum Wage) naming and shaming. With it came another 22,400 employees receiving back pay, as well as a further £8.4 million in fines to pay to the Government, with some firms not having paid minimum wage correctly for over 6 years!

The fact we have seen a second round of ‘naming and shaming’ shows that the government is serious in its commitment to make sure employees receive fair pay. So, to ensure you are paying your employees correctly and to avoid paying out huge amounts in back pay and fines, here are a few things to consider:

1. Be aware of dates, age of your workers and length of service. Rates increase every April and apply to everyone who earns the minimum wage, or just above. However, workers must also receive the appropriate increase when they reach a different age band. In addition, apprentice pay changes according to length of service.
2. Know who is eligible – Zero hours workers, foreign nationals, college students helping out at weekends and senior citizens are all eligible for NMW. The number of hours worked per week makes no difference – someone who does 2 hours of cleaning a week must get NMW.
3. Understand the impact of wage deductions. Employers have recently been caught out when deducting wages from workers to pay for their uniforms. Where this deduction takes pay below the NMW, employers are breaking the law. Some deductions, like tax and NI, are treated differently.
4. Be clear on what time is ‘working time’. Time spent travelling is working time in some situations, so will attract NMW. There has been debate recently on whether workers are entitled to the NMW during sleep-in night shifts, the current ruling says that they are not, but this could be contested. Employees working non-sleeping night shifts are entitled to NMW.
5. Keep an eye on overtime – Not properly recording all hours worked may mean that the odd hour of overtime slips through your net and results in average pay for every hour worked by the worker falling below NMW.