The NMW and the NLW have been in effect for quite a while now, however it seems that some business owners are still trying to avoid paying their employees what they are entitled to. The Government has revealed ten of the most bizarre excuses by business owners who have been found to be underpaying workers.
The NMW currently stands at £7.20 for workers over the age of 25, and is going to increase in April 2017 to £7.50. For workers between the ages of 21 and 24, the minimum amount they can be paid is £6.95 per hour, set to increase to £7.05.
The government introduced these new rates to ensure that workers across the country and different industries are paid fairly, with inflation and living costs taken into account, but it seems employers are coming up with all manner of excuses as to why they feel they can pay less than this. Employers included excuses such as ‘only wanting to pay staff when there are customers to serve and believing it was acceptable to underpay workers until they had ‘proved’ themselves’.
A recent article from the Employer Bulletin, HMRC give examples of common errors made by employers:
- missing an employees birthday, meaning they are no longer paying the correct rate
- making reductions from the employees wages that will then mean the amount will drop below the NMW/NLW rate
- including top ups to pay that don’t qualify
- incorrectly classifying workers, for example treating a mid-level employee as an intern or volunteer
- failure to include all the hours that the employee is working
There are penalties if you fail to pay the correct rates to your employees, such as a maximum fine of £20,000 per worker that has been underpaid. D.E. Ball are experts in helping you manage your payroll, and working out any issues you may have, reducing your risk of falling into the trap of underpaying your employees.