Almost 200 employers have been identified by the government this month for failing to pay the minimum wage to almost 10,000 workers.
And there are warnings that many more may face hefty fines and demands for back payment of wages in the coming months.
The Department for Business, Energy and Industrial Strategy (BEIS) released figures revealing that hospitality, hairdressing and retail were the worst offending sectors.
Charging staff for uniforms or expecting them to fund their own independently, failing to pay overtime and issues around travel expenses were just some of the reasons given for salaries falling below the threshold.
According to a BBC report, one national restaurant chain blamed “an inadvertent misunderstanding” of the rules on staff uniforms for its mistake.
The company said it had asked front-of-house staff to wear black jeans or a black skirt with their -branded top. This was considered as asking them to buy a form of uniform, “and so we should have paid them for it,” it said.
According to experts, unpaid breaks, requiring workers to arrive early for their shift and time spent in meetings could all lead to underpayment.
And in the hospitality sector, additional payments such as tips, service charges and premiums for unsociable working should not count towards staff wages.
The penalties for falling foul of the minimum wage, both financially and in lost reputation, can be high. Employers can be fined up to twice the total wage shortfall, subject to a maximum of £20,000 per worker.
In total 179 employers were fined £1.3m by the government for underpaying their staff. It is also worth noting that minimum pay rates will increase again on April 1.
And in its response to the Matthew Taylor Review of the gig economy the government has announced plans to give all workers the right to a payslip.
It says that will make it easier for 300,000 workers to check that they were being paid the legal minimum.
The government has also launched an awareness campaign for the new minimum wage rates.
And the National Living Wage will increase to £7.83 in April, according to Chancellor’s Philip Hammond’s Spring Statement delivered earlier this month.
The team here at WNJ can help you ensure compliance and avoid financial penalties and bad publicity, as well as giving you piece of mind.
To discuss any matters regarding payroll please contact me on 01772 430000.