The Low Pay Commission has reported that as many as 20% of workers on the National Minimum Wage (“NMW”) could be receiving less than they should.
Peaking during the year at between 305,000 and 580,000, the numbers of workers being underpaid is significant. Two-thirds of those workers are woman.
A particular problem appears to be that when the NMW rates are increased employers are too slow to respond. However as the NMW has been with us since 1999 and the rates are reviewed each and every year, workers who question whether this is good enough have a valid point.
In addition to claims from workers in the Employment Tribunal, employers who fail to act on the NMW are opening themselves up to civil enforcement proceedings with unpaid debts being pursued by HMRC. For the most extreme cases, employers (including company officers) are subject to criminal prosecution if they: refuse or wilfully neglect to pay the NMW; fail to keep the necessary records; keep or provide false records or information; intentionally obstruct or delay an enforcement officer; and/or refuse or neglect to answer questions or provide information to an enforcement officer.
At first glance the NMW rates look simple but applying them properly to your workforce takes care and attention to detail. Some of the largest employers in the country, with an army of HR professionals and accountants at their disposal, make mistakes. If you have any doubts, do not hesitate to speak to one of our experts.