Partner Article

Minimum wage - the latest Government crackdown

The Government recently announced that the maximum penalty for employers who fail to pay their workers the national minimum wage will increase to £20,000 and will be calculated as 100% of the amount underpaid.

The changes are due to come in to effect as early as February 2014. In addition, the Government will continue with its naming and shaming of employers who flout the rules.

This will be a significant increase from the current penalty scheme which provides for 50% of the amount underpaid for all workers included in the notice issued to the employer by HMRC, subject to a minimum of £100 and maximum of £5,000 – in addition to payment of the underpaid amount. The employer also benefits from a reduction where the penalty is paid within a set period.

Since 1 October 2013, the current NMW rates applicable for workers are:

• £6.31 for a standard adult (aged 21 and over)
• £5.03 for those aged 18 to 20
• £3.72 for 16 and 17 year olds (above school leaving age but below 18)
• £2.68 for apprentices under 19 (or 19 and over but in the first year of their apprenticeship).

Whilst it will be straightforward to identify and calculate payment of the minimum wage in most circumstances, there are a number of areas where employers can come unstuck including the application of the accommodation offset where the employer provides accommodation to the employee, training time, on call time and status issues in determining who is entitled to the NMW (e.g. interns and volunteers?).

The NMW has also hit the headlines this week with comments from the Chancellor George Osborne indicating that he would like to see an above inflation increase to the rate.

If you have any queries or concerns over your workforce and whether you are meeting the requirements the LA employment team is here to help.

This was posted in Bdaily's Members' News section by Lester Aldridge LLP .