The National Minimum Wage – make sure your business doesn’t end up on the government’s name and shame list!

On 15 February 2017, the government ‘named and shamed’ more than 350 employers who had underpaid their workers the national minimum or ‘living’ wage. Department store Debenhams topped the list of offending employers, having failed to pay £134,894.83 to nearly £12,000 workers. Under the government’s ‘name and shame’ scheme, the names of all employers who are issued with a ‘Notice of Underpayment’ by HMRC are published online unless the arrears are £100.00 or less, or there are exceptional circumstances.

On an interesting side note, the government has also published another list – the most bizarre reasons for underpaying the National Minimum Wage (“NMW”). Such reasons (all of course erroneous) include an employer believing their worker did not ‘deserve’ to be paid the NMW, another believing non-UK nationals do not need to be paid it and a further employer stating that their employee ‘only makes the tea and sweeps the floors’.

To avoid having their names published on either list, it is important that employers keep up to date with their national minimum and living wage obligations. If they do not, not only will employers find themselves on the government’s ‘name and shame’ list, but they may also face financial penalties of up to 200% of arrears, capped at £20,000 per worker. The most serious offenders could also face prosecution.

By way of a reminder, the NMW and the National Living Wage will be increased from April 2017 as follows:

  • The National Living Wage (for those aged 25+) will go from £7.20 to £7.50

  • The minimum wage for those aged 21+ will go from £6.95 to £7.05

  • The minimum wage for those aged 18 to 20 will go from £5.55 to £5.60

  • The minimum wage for those aged under 18 will go from £4.00 to £4.05

  • The apprentice rate will go from £3.40 to £3.50

If you have any questions about your minimum wage obligations, please do not hesitate to contact a member of our team.