20 February 2024
The Department for Business and Trade (DBT) has released the latest list of companies that fell afoul of National Minimum Wage (NMW) regulations and were found to have underpaid staff.
This round of naming (round 20) includes over 500 businesses affecting over 172,000 workers.
The top three reported errors were as follows:
- reductions/deductions – 183 employers
- unpaid working time – 160 employers
- failure to pay the correct rate to apprentices – 82 employers.
Companies that undergo a compliance check from HM Revenue and Customs (HMRC) can find themselves on this list if they are found to have breached NMW rules. The list shows the number of employees affected as well as a total underpayment found by HMRC.
These underpayments can also be accompanied by a fine for 200% of their value. But bigger than that, the reputational damage of being named on the list can’t be overlooked.
The CIPP urge the list to be interpreted carefully, the size of the underpayment may seem large but when distributed between the number of employees can be relatively small. This is not to underplay the severity of NMW breaches, compliance should be the first thing to consider, but payroll professionals are well aware of the small errors that can result in a breach, for example a manager requiring a certain colour of shirt to be worn for work, resulting in a deduction for NMW purposes.
Additionally, a policy paper, jointly from DBT and HMRC, has been updated, detailing the government’s approach to NMW enforcement, including the naming and shaming scheme.
You can find more guidance and information on NMW at the links below:
The National Minimum Wage and Living Wage: Overview
National Minimum Wage and Living Wage calculator for employers
Minimum wage for different types of work: Overview
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