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Many employers ‘completely disinterested in NMW regulations’

Employment law specialist Lupton Fawcett Denison Till has found that over a quarter of employers in the UK are not sure if they are adhering to the law surrounding National Minimum Wage allowance.

Analysis of government statistics from the Department for Business, Innovation and Skills, produced by the Yorkshire-based law firm, shows that 27.8% of employers either don’t know, have no idea or haven’t checked in a while if they comply with National Minimum Wage regulations. Despite it being a legal requirement to pay all employees the minimum wage, 50% of employers sampled do so because they have to by law, while the other 50% do so because they think it’s fair. Different wage rates apply to different categories of employee, and apprentices and interns can pose particular problems.

Employment law specialist Louise Connacher, from Lupton Fawcett Denison Till’s employment department, says: “It’s disturbing to see that not all employers know if their business complies with National Minimum Wage legislation. According to our research, some employers show complete disinterest in the regulations, which is quite concerning considering the penalties that can be faced by those that do not pay the National Minimum Wage.”

Employers who breach the National Minimum Wage law must not only pay back arrears of wages at current minimum wage rates, but could also face a financial penalty of up to £20,000. Additionally, employers will be “named and shamed” publicly on the DBIS website – and will almost certainly be named in the national or local press as a result. Some 73.8% of employers are either completely unaware of the sanctions or, if they do know about the potential fine, do not know how much it is.

Mrs Connacher continues: “For companies to admit that they don’t understand what penalties they could face is worrying. A maximum penalty of £20,000 on top of wages owed can have a significant impact on a business’s finances, and public “naming and shaming“ can affect their reputation both locally and nationally, so it’s vital employers pay attention to changes in National Minimum Wage.”

According to the research, 81% of employees feel that pay rises are the most difficult topic to discuss with their employer, and feel that time should be set aside to talk about wages and the guidelines involved.

Mrs Connacher says it is important that staff feel like they can come to their managers with problems, and senior staff should be making it clear when they have time to discuss issues. A way to ensure all the workforce are being paid the correct National Minimum Wage is by asking a law firm to carry out a National Minimum Wage audit of their workforce.

This was posted in Bdaily's Members' News section by Louise Connacher .