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  • Overview

    The saying goes “another day, another dollar”.  For some this is very true, if you’re willing to replace dollar with pound sterling.  It is easy to think that the issue of workers being paid less than they should or, worse still, less than the National Minimum Wage (NMW) or National Living Wage (NLW) is a thing of the past; confined to the history books or television shows.  Sadly in 2018, this is not the case.

    As part of the government’s on-going naming and shaming scheme it released details of a record number of employers that have failed to pay the NMW/NLW.  In this recent report, there was circa 240 employers who had underpaid a cumulative total of £1.44m to about 22,400 UK workers.   These employers were fined a cumulative total of £1.97m.  

    The recent list of employers can be found and downloaded on the link below.  There are some high-profile employer names included on this list, such as Doncaster Rovers FC and Odeon.  

    These new results brings the totals up to more than 1,900 employers named who have had to pay £10.8m back pay to over 90,000 workers and a whopping £8.4m in fines.  

    Some of the sectors with the highest number of employers were named were:

    • the social care and care home sector
    • hospitality
    • retail

    Education and construction also made an appearance.

    Some of the top reasons for underpayment of the NMW/NLW include:

    • uniforms and other costs
    • the underpayment of apprentices
    • failure to pay the correct travel time.

    Our thoughts

    Some commentators have speculated whether having the naming and shaming scheme will actually deter people from entering certain sectors because they know it has a higher likelihood of being paid less than the NMW/NLW.

    Others question the effectiveness of naming and shaming.  It has been commented that those on the list are there because they do not care that they have underpaid people and so are unlikely to be ashamed of their actions.  Whilst it is an interesting question, having conducted many matters involving underpayments, we know just how open to interpretation some of the trickier elements of the NMW/NLW rules are, for example in relation to travel time or on-call workers.

    Deductions for uniforms and other costs

    When considering making a deduction for uniforms or any other cost, ensure that the deduction does not result in the individual being paid less than the NMW/NLW.  

    In addition and to avoid claims for unlawful deduction from wages, we would advise that clauses are put in place to ensure that deductions are made lawfully.  These clauses can be inserted either into the contract of employment or in a separate agreement.

    Current rates

    The NMW and NLW have risen in the last two years and it can be easy to be working off outdated rates.  To assist you, we have outlined relevant NMW/NLW below.  The rates set out below are all per hour. 

      National living wage (Age 25+) Standard adult rate (Age 21-25) Development rate (Age 18-20) Young workers rate (Age16-17) Apprentice rate                    

    From 1 April

    2018-30

    March 2019

    £7.83 £7.38 £5.90 £4.20 £3.70

     

    In the event that your organisation pays less than the NMW/NLW, you could face a NMW/NLW claim, claim for unlawful deduction from wages claim, criminal charges and a fine of 200% of the total arrears per worker, capped at £20,000 per worker.  Not to mention ending up on the list!

    If you have any concerns regarding the payment of workers then please do not hesitate to contact us.

    For more information on this, please visit: Record 22,400 minimum wage workers to receive millions in backpay.

  • Related Services

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    We act for businesses of all shapes and sizes and in many different sectors. Our advice covers all aspects of the employment relationship, helping to settle disputes, defending employment tribunal claims and providing immigration compliance audits.

Get In Touch

By submitting an enquiry through 'get in touch' your data will only be used to contact you regarding your enquiry. If you would like to receive newsletters from Thomson Snell & Passmore please use the separate form below.

Newsletter Sign Up

General Private Client UpdatesGeneral Commercial UpdatesConstruction UpdatesCourt of Protection UpdatesAgriculture & Rural Affairs UpdatesCommercial Property UpdatesEmployment UpdatesDispute Resolution UpdatesCorporate & Commercial UpdatesCharities & Not for Profit UpdatesFood & Drink UpdatesEducation UpdatesTransport & Logistics UpdatesFamily Business & Owner Managed Businesses Updates

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