As part of Round 21 of the National Minimum Wage Naming Scheme, the Department for Business and Trade (DBT) has released the latest list of companies that failed to pay the National Living Wage (NLW) and National Minimum Wage (NMW).
HM Revenue and Customs (HMRC) investigations that took place between 2015 and 2022 discovered that nearly 60,000 workers were left out of pocket by 518 employers.
Over £7.5 million owed to these workers has now been repaid by their employers, with some businesses facing additional penalties of up to 200 per cent of their underpayment.
The National Minimum Wage Naming Scheme aims to enforce payroll compliance by “naming and shaming” companies that fail to meet NMW and NLW requirements.
The biggest reasons for underpayment were:
What employers need to know
Failure to pay your employees correctly, even if accidentally, can lead to severe financial consequences.
Not only will you face financial penalties, being named in the next round of the National Minimum Wage Naming Scheme could damage your reputation and lead to the potential loss of business.
The minimum wage law applies to all parts of the UK, so it is vital that you make sure you are paying your staff in line with NMW regulations.
You should always carry out the necessary checks to make sure all your employees are being paid the correct NMW rates.
Take extra care correctly identify and classify apprentices.
An apprentice is only eligible for the apprentice NMW rate if they are:
Employees aged 19 and over who have completed the first year of their apprenticeship must be paid at least the NMW rate for their age group.
You also need to check that salary deductions don’t reduce pay below NMW rates.
This includes, for example, costs incurred by the worker to meet a compulsory dress code, cover training costs, or purchase Personal Protective Equipment (PPE).
The NMW legislation treats these costs as a reduction in pay.
Therefore, you must account for these expenses to ensure a worker’s pay does not fall below the NMW.
You must also keep clear records to show that all staff are being paid at least the NMW for every pay reference period worked.
Make sure you understand which elements count as pay for minimum wage purposes and ensure that any deductions made do not take the worker’s pay below the NMW rate.
The Government has published Calculating the Minimum Wage Guidance to help you make sure your staff are all paid correctly.
Guidance on minimum wage rates with Grunberg & Co
Meeting the NMW requirements is essential for all employers.
Getting it wrong means you could face hefty fines, reputational damage, and an unhappy workforce.
At Grunberg & Co, our payroll experts are here to make sure you always get it right.
We offer a complete and reliable outsourced payroll solution, so you can have peace of mind knowing that your staff are receiving the correct wages.
Whatever the size of your workforce, you can save time and money by outsourcing your payroll to us – keeping your employees happy and making sure your company name doesn’t end up on DBT’s name and shame list.
Don’t get caught out by wrong NMW rate payments. Contact Grunberg & Co today for expert help with your payroll.
