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Fines Issued as Minimum Wage Underpayments Increase

minimum wage underpayments

National Minimum Wage underpayments in the UK have more than doubled in the 2017/18 financial year. A total of 6,027 reports of non-compliance were received, up from 2,573. With 22,400 workers being underpaid a total of £1.44 million.

The top reasons for underpayment are:

  • employers taking deductions from wages for costs such as uniforms
  • apprentices not being paid correctly
  • employers failing to pay travel time
  • using the wrong time periods for pay calculations

HMRC have made it easier for employees to report National Minimum Wage underpayment with the online complaint system, since its release the reports have increased.

Recent Fines

Well-known organisations such as Card Factory and Odeon & UCI Cinema Group were fined for underpaying staff. In total, Card Factory owed £430,097 to more than 10,000 workers and Odeon & UCI Cinema Group owed £4,438.92 to 237 employees. You can find the full list of employers who were found to have underpaid National Minimum Wage here.

Karl Thomas, Partner and Head of Employment at Loosemores Solicitors commented:

“The headlines focus on the larger organisation but smaller businesses without HR advice are getting caught out by National Minimum Wage regulations too. It is now easier and quicker for employees to report discrepancies and more organisations are having to deal with costly inquiries as well as being ‘named and shamed’ by HMRC. Employers need to review how pay is calculated to ensure that they are not inadvertently in breach of the minimum wage legislation.”

Prevention

Prevention is the best action to take to ensure your business complies with the law. Loosemores Solicitors offers ‘Loosemores HR’, a service which gives employers access to specialist employment law solicitors and experienced HR consultants for a simple fixed monthly fee. You get the advice you need, when you need it, with the benefit of knowing exactly what the cost will be in advance. Learn more about Loosemores HR.

Or please get in touch:

Phone – 02920 224433

Email – ThomasK@loosemores.co.uk

 

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