UK National Minimum Wage
The Small Business, Enterprise and Employment Act 2015 is now an act of law and will amend the current penalty for underpayment of the National Minimum Wage (NMW).
Part 11 of The Small Business, Enterprise and Employment Act 2015 contains measures that amends section 19A of the NMW Act so that the maximum penalty will be determined by the amount owed to each worker and the limit on the penalty will be so the extent to which the amount owed to each individual worker can be taken into account. Previously the maximum fine was just £5,000 for each employee.
Secondary legislation will be introduced to ensure that employers in breach of the NMW regulations will be subject to a fine of up to £20,000 for every underpaid worker.
Most workers in the UK over school leaving age are entitled to be paid at least the NMW. The NMW rates are reviewed each year by the Low Pay commission.
Current NMW rates
- £6.50 for workers 21 and over
- £5.13 18 - 20 yrs
- £3.79 for 16-17 yrs, who are above school leaving age but under 18
- £2.73 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.
New NMW rates from 1 October 2015
- £6.70 for workers 21 and over
- £5.30 18 - 20 yrs
- £3.87 for 16-17 yrs, who are above school leaving age but under 18
- £3.30 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.
It is important to note that these rates, which come into force on the 1st October 2015, apply only to pay reference periods beginning on or after that date.
If HMRC finds that an employer hasn’t been paying the correct rates, any arrears have to be paid back immediately. There will also be a penalty and offenders can also be named by the government.
It is the employer’s responsibility to keep records proving that they are paying the minimum wage - most employers use their payroll records as proof. All records have to be kept for 3 years.
It is important that information outlining how much and how often an employee gets paid be shown very clearly in the written statement of particulars. The employer must provide the employee with a copy of this written statement within 2 months of their start date. This is the law!
If you have no contracts in place or wish to update your current employee contracts then simply click here? There is no need to use HR specialists or solicitors; Bright Contracts keeps things simple and easy for everyone!
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