Ruth Mitchell

Minimum wage confusion still rife

Widespread confusion and a lack of awareness among small firms still surrounds the minimum wage, according to new research.

Almost a third of small business owners are unaware the national minimum wage will increase on October 1, according to research from Bibby Financial Services. This figure increases to 44% for companies with fewer than four members of staff.

A further 32% of small business owners did not know that the current rate was £5.52 per hour rising to £5.73 next month.

Agricultural businesses are the least informed with 66% uncertain about the details of the increase. In contrast, more than three quarters (78%) of hotels and catering firms knew about the increase.

David Robertson, global chief executive of Bibby Financial Services, said: “It is worrying that there is still so much uncertainty among small businesses about National Minimum Wage levels, particularly when the government is introducing tougher penalties for firms who, for whatever reason, fail to abide by minimum wage legislation.”

Last year, a children’s nursery owner became the first person to be criminally prosecuted by HMRC for breaking minimum wage laws. Each criminal offence carries a maximum fine of £5,000 and a criminal record.

Robertson said the legal implications of ignoring the minimum wage made it clear ‘that small businesses need to be fully aware of the legislation or risk the consequences’.

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