The Minimum Wage: Common Mistakes of Employers
Reminder for employers that National Minimum Wage and National Living Wage rates have increased and to be aware of common mistakes
On 1 April 2017, National Minimum Wage and National Living Wage rates increased to:
- National Living Wage (25 years old and over) – £7.50 per hour
- National Minimum Wage adult rate (21 to 24 years old) – £7.05 per hour
- National Minimum Wage (18 to 20 years old) – £5.60 per hour
- National Minimum Wage (16 to 17 years old) – £4.05 per hour
- National Minimum Wage (apprentice rate) – £3.50 per hour
As an employer you have a duty to be aware of and comply with these rates.
Common mistakes of employers
There are some common mistakes which employers have made when calculating workers’ wages which can result in not complying with the law.
These include:
- Paying staff at the wrong rate by failing to implement annual rate increases, missing birthdays and therefore not moving workers from one age band to another or making errors in applying the apprentice rates.
- Making deductions or payments connected to the job which take pay below the legal rates, eg asking staff to pay for uniforms, tools and safety clothing.
- Unpaid working time, which is essentially additional hours worked and not paid eg time spent helping to shut up shop or travelling time between assignments.
- Worker status errors by mistakenly treating workers as either volunteers or self-employed.
If HM Revenue & Customs finds that you haven’t paid the correct minimum wage, you will have to pay any arrears to the worker together with a penalty. You may also be named in the media.
Read more about NI employers named and shamed for underpaying minimum wage.
