The MIA’s Business Support Helpline partner, Croner, report on the importance of paying employees correctly and give their expert advice…
Back in March, 179 employers were named and shamed by the Government for failing to pay the National Minimum Wage. The discovery led to employers paying out a total of 1.1m to their workers.
Fast forward to July, and we face the same situation, but this time—the pay-out is even greater.
How much has been paid out?
This time, approximately £1.4 million has been paid out to 22,400 workers. This back pay is more severe for some employers who have been failing to pay the NMW for up to seven years. The fines for these particular firms are almost £2 million in total.
Nearly 240 employees have been named and shamed, and the spectrum of businesses is broad. Everything from care homes, and car washes, to hairdressers and sport clubs have been caught out.
Why has this happened again?
There are lots of reasons that employers have failed to pay the NMW. One common reason is that the employer deducts uniforms and other worker expenses from their wage. Similarly, failing to pay for travel time, and underpaying apprentices can lead to employee’s wages dipping below the NMW.
This second round of naming and shaming goes to show that the government is serious about making sure workers are paid fairly, and discrepancies will not be ignored.
Andrew Griffiths, Business Minister, said: “Employers who don’t do the right thing face fines as well as being hit with the bill for backpay.
“The UK’s lowest paid workers have had the fastest wage growth in 20 years thanks to the introduction of the National Living Wage and today’s list serves as a reminder to all employers to check they are getting their workers’ pay right.”
Suzanne Tanser, Reward Business Manager at Croner states, “As well as a legal obligation to pay the NMW, employers also have a responsibility to their staff to ensure that they are paid fairly. It’s worrying that another 239 businesses, some of them of considerable size, have failed in this respect. Hospitality, retain and social care have borne the brunt of this latest round of fines with over a third of companies being named and shamed for underpaying just one employee. The message is clear that just one error is enough to result in financial and reputational damage”
What can I do to make sure I’m paying my employees correctly?
The simplest way to check you are paying your employees correctly is to compare your pay rates with that of another company that has similar job roles to your own.
If you are uncertain, Croner can assist with your salary benchmarking and help with any issues surrounding national minimum wage.
MIA members benefit from FREE advice from Croner. Email email@example.com or call 01403 800500 for the exclusive Business Support Helpline scheme number