In 2018 the government named and shamed nearly 180 employers for failing to meet national minimum wage payments… Read the top 7 reasons for these failures and be sure to avoid them!
Failure to Increase
- National Minimum Wage increases annually and it is a legal requirement that from 1st April each year employers meet the new rates. Minimum wage rates uplift will impact employees on their first full pay period after the 1st E.g. if a pay period runs from 27th March – 10th April, an employer is not required to increase minimum wage rates as the pay period began prior to 1st April. Instead NMW will increase from the next pay period 11th April – 24th April as this is the first pay period starting on or after 1st April.
- It is important to have accurate employee data so rates can be updated at the correct time. Minimum wage increases at the ages of 18, 21 and 25. If a worker moves into the next banding at the start of a pay period they need to be paid at the new higher rate.
- Apprentice rates only apply to apprentices on the first year of their apprenticeship only, unless they are under 19 years old’s. Only in these cases should an apprentice be paid the apprentice minimum wage rate. Outside of this apprentices should be paid the minimum wage rate for their age.
- Uniform deposits that are taken at the start of the employment, will potentially take a minimum wage worker below the national minimum wage. A deduction can be made if a worker fails to return uniform at the end of employment. This can be considered misconduct and can be legally deducted from wages if agreed in their contract of employment. This will not affect minimum wage payments.
- If an employee has a contractual requirement to wear certain items of clothing and they purchase these items, this will affect an employee’s national minimum wage payment. E.g. if an employee’s contract states they must wear black jeans and a white shirt and the employee purchases these items, they must be reimbursed in order not to take them below minimum wage.
Not Paying for Travel Time
- Employees are entitled to be paid for some periods of travel time. If an employee is travelling for work purposes, this qualifies for national minimum wage (however, travelling between their normal place of work and home does not qualify). Below are some examples of travel time that qualifies for NMW;
- Travelling from one work assignment to another (as long as this isn’t contractually a normal place of work)
- Travelling from the workplace to training venues.
Not Paying for Off Shift Time
- Employees that are required to stay beyond the time of their shift, must have this time accounted into their minimum wage calculation. E.g. if an employer must stay behind 10 minutes after their shift, to clear a security alarm, this 10 minutes must be accounted for in their minimum wage calculations, otherwise it will reduce their payment below minimum wage.
If you’re concerned about minimum wage payments, why don’t you talk to us so you can put your mind at rest and put your feet up.