The Guardian recently reported that almost 700 firms, including Boris Becker’s favourite Wimbledon restaurant and Brighton and Hove Albion Football Club, have been fined £1.4m for paying staff below the National Minimum Wage.
On top of the fines, which stretched from £2,000 for minor discrepancies to £20,000 for the most serious culprits, a Tribunal ruled that thousands of staff were owed £3.5 million to compensate for the shortfall in their salaries.
And to make things loud and clear, Iain Wright, chairman of the Commons business select committee, announced that companies must be sent a “financial message that underpaying staff will not be tolerated”.
He added: “That has to mean hitting the companies in their pockets where necessary and fining them much more than the monies saved on breaking the law to send out a clear message that exploitation of low-paid workers will not be tolerated.”
According to the report, many of the businesses argued that they did not have sufficient help to adapt to legal and practical changes in recent years.
No matter what, all businesses, whether they take on one employee or one thousand, must pay staff at least the National Minimum Wage.
Right now, this stands at £7.20 per hour for employees over the age of 25, or slightly less if they’re younger.
|£7.20 per hour||25 and over|
|£6.95 per hour||21-24|
|£5.55 per hour||18-20|
|£4.00 per hour||16-17|
|£3.40 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.|
The rate will change every April starting this year. The rates from 1 April 2017 will be:
|£7.50 per hour||25 and over|
|£7.05 per hour||21-24|
|£5.60 per hour||18-20|
|£4.05 per hour||16-17|
|£3.50 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.|
Employers can calculate whether an employee is receiving the National Minimum Wage by dividing the worker’s salary (before tax) by the number of hours worked (including any overtime). If your employee needs to buy uniform or equipment, or needs to travel to complete his or her job (not including travel to and from work), the value of these expenses need to be deducted from their salary before calculating.
Katie Hewlett, Payroll manager at Moore Thompson, said: “Ideally, your payroll should be prepared every month by a professional. Not only will a payroll expert give your employees peace of mind that they will be paid promptly and properly, but it will help you, as an employer, avoid legal and regulatory pitfalls.”