Minimum wage changes have traditionally always taken place in October. However, the introduction of the national living wage in April 2016 gave us a new date in the diary to keep an eye on.
Introduced at £7.20 per hour as essentially another band of minimum wage, the national living wage has now been in force for almost a year and stuck at its introductory rate, despite the other minimum wage bands increasing in October 2016. April 2017 will see the next set of changes, to all bands of minimum wage.
From 1 April 2017, the rates will be:
|25+ (National Living Wage)||£7.50 per hour|
|21 to 24 (Standard adult rate)||£7.05 per hour|
|18-20 (Development rate)||£5.60 per hour|
|16-17 (Young workers)||£4.05 per hour|
|Apprentice||£3.50 per hour|
|Accommodation Offset||£6.40 per day|
2016 also saw the financial penalty for non-payment being doubled, meaning 200% of arrears will be due (although this will be halved if the employer pays within 14 days). HMRC also continues to name and shame employers who have underpaid, as well as impose penalties of up to £20,000 per worker and refer cases to the CPS for a criminal prosecution.
Since the introduction of HMRC’s ‘name and shame’ list in October 2013, 687 employers have been named and between them, owed over £3.5 million in underpaid wages. August 2016 also saw the biggest list since its introduction, with 197 companies named, owing just over £465,000. A company’s name going onto the list itself doesn’t happen lightly. Before being named, employers will have already received a notice of underpayment, which includes the opportunity to appeal.
HMRC also recently released a ‘top 10 worst excuses’ for not paying the minimum wage which, somewhat comically, included a worker not deserving the minimum wage because she “only makes the teas and sweeps the floors”, an employer and his accountant speaking different language meaning the accountant doesn’t understand the correct wages, an employer thinking it was “okay” to pay foreign workers below the minimum wage rate because they aren’t British and shop workers only being paid when they are “actually serving someone”!
Sue Evans, Partner in Lester Aldridge LLP’s Employment and HR Team, commented “It is still worrying to see just how many businesses fall foul of their minimum wage obligations and with the government increasing the enforcement budget available to HMRC, as well as the penalties for non-payment, it’s something employers need to keep on top of”. Ends
Providing outstanding legal advice, Lester Aldridge has core practice areas in real estate, litigation, private client and commercial services, which it delivers nationally and internationally through its global alliance with MSI, a network of professional service firms.
For advice and assistance with minimum wage obligations, please contact Sue or a member of her team on 01202 786 161.