Stopfords
Stopfords

Top 10 Mistakes Employers Make When Paying the National Minimum Wage

Date:
Category:
Latest News

There are many reasons why an employer may find themselves paying the National Minimum Wage (NMW) incorrectly. To prevent you from making these mistakes please find below a list of the most common reasons that cause underpayment.

  1. Failure to apply the annual Minimum Wage rate increase on 1 April.
  2. Missing employees’ birthdays as they turn 18, 21 or 25 years old and correctly changing the NMW rate.
  3. Paying an apprentice rate to an employee who isn’t an apprentice. An apprentice must have an apprenticeship contract and undergo an element of structured training.
  4. Paying the apprentice rate for too long. The apprentice rate only applies to apprentices who are under the age of 19, or if aged 19 or over within the first year of their apprenticeship.
  5. Making wage deductions for items and expenses that are related to the job. For example safety clothing, uniforms and tools etc.
  6. Making wage deductions that are deemed to for the employer’s “own use or benefit”. For example, a Christmas club saving scheme. It doesn’t matter that the worker can choose to buy into the scheme and the employer doesn’t have to make a profit from it.
  7. Charging an employee more than the stated offset rate for living accommodation which is currently £49 per week.
  8. Not paying for all the time worked such as time spent travelling, training or downtime at the employer’s disposal.
  9. Not paying for additional time worked such as time spent clearing security checks once a worker’s shift has finished.
  10. Including elements of pay that don’t count towards minimum wage such as tips and the premium element of pay associated with shift premium.

Related news

When an employee is provided with a company car, to avoid a taxable car fuel benefit, fuel must only be provided for business travel.

View article about Advisory Fuel Rates from 1 December 2018

What our clients say