Minimum Wage Rises 20p an Hour – but Firms Unaware of Fines for Not Paying It
More than 80% of businesses are unaware of the fines they could risk for not paying the Minimum Wage as it rose by 20p an hour on 1st October, it is claimed.
A survey by the Department for Business, Innovation and Skills found 81% of bosses in the South West did not realise they could be fined £20,000 per worker for failing to pay the wage.
There are estimated to be 110,000 people in the South West being paid on or below the National Minimum Wage.
The wage rose 3% to £6.70 an hour for over-21s from 1st October; although the wage for workers aged 18-20 only reached £5.30, with under-18s paid £3.87. Apprentices saw their minimum wage rise 21% to £3.30.
The wage rose to £7.20 for over-25s in April.
But many low-paid households could lose money from cuts to Working Tax Credit.
A lot of small businesses are being affected by pension’s auto-enrolment and a few tribunal cases coming from Europe on things like travel time, holiday pay and overtime and commission. Some employers are likely to be affected by it but the reality is more people are likely to be affected by the increase to the National Living Wage which goes up to £9 by 2020.
The National Minimum Wage is enforced by HM Revenue and Customs and they can be extremely robust. The responsibility is on the employer to maintain accurate time sheets and prove that they are paying the correct rate when the National Minimum Wage rises each year.
Employers must also ensure that – as younger employees grow older – they are paying them at the right National Minimum Wage rate for their age group.
Breaches of the National Minimum Wage are dealt with at Employment Tribunals and employers can be named and shamed by government.
The introduction of the new National Living Wage was the most radical change to wages in recent years, introducing a completely new wage bracket for the over 25s.
As well as focusing on enforcement, the government must clearly and proactively communicate the change to employers – ensuring businesses fully understand what they need to do and when.