Employers failing to pay minimum wage will be ‘named and shamed’

Robyn Black

Robyn Black

12 February 2020

The practice is to be resumed under revamped rules that emerged from a government review of the scheme.

The threshold under which employers will be named has been raised, however. Under the new rules firms that owe arrears of more than £500 in National Minimum Wage (NMW) payments to their workforces will now be named. The threshold was previously £100.

Businesses that underpay by less than £100 will have the chance to correct their mistakes without being named, but will still be forced to pay back workers and can face fines of up to 200% of the arrears.

The government has also promised increased support for employers to comply with NMW legislation and to change regulations to widen the range of pay arrangements available to business employing ‘salaried hours workers’ (workers who receive an annual salary in equal instalments for a set number of contracted hours). Under these changes, workers who are often paid hourly or per day and consequently have different pay checks every month can be classified as salaried workers.

It is hoped the changes will provide more flexibility in how salaried workers are paid, without reducing protections, and that it will be less likely that businesses will be caught out by the NMW legislation due to the differences in their hours from one month to the next.

The changes are expected to come into force on 6 April 2020.

Industry body UKHospitality has expressed concern however, saying that the sector needs specific support.

Chief executive Kate Nicholls said: ‘We believe more needs to be done to totally rule out administrative errors. Some businesses have been caught out by admin errors in the past, rather than through deliberate underpayment. We have made this point clear to the Government previously and highlighted the potential for employers to make honest mistakes on issues like accommodation offset or staff uniforms. The focus should be on tackling those businesses who knowingly underpay.

'Sector-specific guidance which incorporates the various nuances and needs of vastly different businesses would help clear up any misunderstanding and help employers understand their obligations and prepare for the changes. We hope the Government will work with the hospitality industry to promote compliance.'

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