Chartered Tax Advisers & Accountants

National Minimum Wage – Offenders named and shamed

Published On: 05 March 2015
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HM Revenue & Customs (HMRC) has recently named 70 offenders who have failed to pay the National Minimum Wage (NMW).  This now means some 160 firms have been named and shamed since a new regime began in 2013.

All the firms named now face financial penalties of up to £20,000, as well as loss of reputation.  Legislation is also being planned so that the fine can be applied to each underpaid worker, rather than per employer.

This latest naming and shaming comes shortly after the Low Pay Commission recommended the largest increase in the national minimum wage since 2008.  If accepted by the Government, this would increase the hourly rate by 3% to £6.70 from £6.50.

There are a number of common problems, the main one relates to apprentices.  The apprentice rate (the lowest at currently £2.73 per hour) applies to 16-18 years and those who are 19 years and over who are in their first year.  All other apprentices are entitled to the NMW based on their age.

An easy error is failing to notice an employee who moves from the 17 year old rate to the 18 year old rate.

Where workers are provided with accommodation, this also needs to be taken into account as it can affect the NMW calculation.

The 70 offenders range from a business in Nottingham who failed to pay over £37,000 to 184 workers (an average of £200 each) to a business in Durham who failed to pay just over £100 to one employee.  So, for the sake of failing to pay just over £100 the business is now named and shamed.