In June, the Government published the names of 202 employers who failed to pay their workers the National Minimum Wage / National Living Wage (both referred to in this article as ‘NMW’).

The businesses named range from high street brands underpaying thousands of employees by a total of up to £1m, to small businesses underpaying as little as £500 to a single employee.

The range of type and size of business named indicates just how easy it can be to fall foul of the NMW rules. To avoid appearing on future lists, it’s important for employers to understand how the rules apply to their workforce, and ensure they are sticking to them.

Where did it all go wrong?

The employers named by the Government failed to meet NMW obligations in a number of ways, the most common being:

• 39% deducted pay from workers’ wages so they went below the NMW.
• 39% failed to pay workers correctly for their working time.
• 21% paid the incorrect apprenticeship rate.

Further guidance

The Government publishes guidance for employers on NMW and further details can be found as part of the Government’s Check Your Pay campaign. Specific guidance on calculating the minimum wage is also available, which includes a handy checklist for employers covering common causes of underpayments.

 

This article reflects the position at the date of publication (17 July 2023). If you are reading this at a later date you are advised to check that that position has not changed in the time since.

We regularly publish articles on a range of tax and wider topical issues which affect employers. If you wish to subscribe to our monthly Employer Focus e-newsletter, please contact us.