Government Names and Shames NMW Dodgers

The Government has published its latest ‘name and shame’ list of 230 employers which failed to comply with the rules on the National Minimum Wage/National Living Wage.

The Government has published its latest ‘name and shame’ list of 230 employers which have not complied with the rules on the National Minimum Wage/National Living Wage.

It is estimated that companies will have to pay to their workers a record £2million in compensation claims, with up to 13,000 employees in line to receive some form of monetary reimbursement. One of the worst offenders on the list was the retailer Argos, who admitted in February they failed to pay the sum of 37,000 staff an average of £64 each.

The current rate for the National Living Wage is £7.50 per hour.  The adult rate for National Minimum Wage is £7.05 for those aged between 21 and 24.

How to ensure the correct NMW calculation

Employers should make sure that all workers are receiving the National Minimum Wage/National Living Wage by doing the following:

• Identify the pay reference period
• Calculate the total remuneration received in the pay reference period

Employers should note that there are some payments that reduce the amount of pay, but would be taken into account for the purpose of the National Minimum Wage; there are also certain deductions that can reduce the amount of workers’ total pay for the purpose of the National Minimum Wage, whereas other deductions do not.

• Determine the hours that should be counted during the pay reference period
• Calculate the worker’s hourly rate of pay
• Divide the total payments received in the pay reference period by the hours that should be counted during the pay reference period
• Decide the National Minimum Wage (if any) to which the worker is entitled

Make sure your keep records

Employers are required to keep sufficient records to establish that their workers have received the National Minimum Wage. Under the law, there is a presumption that the worker has not been paid the National Minimum Wage unless the employer can prove to the contrary.

Records should be kept for a minimum period of three years from the end of the pay reference period.

HMRC enforcement – get legal support

We have acted for a number of organisations where HMRC have sought to ascertain whether the National Minimum Wage has been paid to workers. Early stage advice is key to swiftly resolving the matter. The enforcement measures available to HMRC include serving a notice of underpayment, civil penalties, naming and shaming, recovery of underpayment through tribunals or civil courts and criminal prosecution.

Should an employer disagree with a notice of underpayment, then it is open for an employer to appeal to an employment tribunal against the notice; this appeal must be brought within 28 days of the date of which the notice was served.

MORE INFORMATION 

Should you require any advice in respect of the National Minimum Wage or National Living Wage, please contact our Employment Department – our team of expert solicitors will be able to assist. Call on 01708 229444 or email us using our contact form.

This article was written by Alexander Pearce, Employment Law Associate at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of August 2017.