Many employers are unknowingly underpaying the national minimum wage. HMRC guidance and support is here to help you avoid these costly mistakes.
National Minimum Wage is more than just a pay rate, it is a calculation.
Mistakes are easy to make, even if you pay your staff an hourly rate that is above the minimum wage. There are complexities in the legislation that can bring workers below NMW. Please refer to the employer checklist that outlines common causes of minimum wage underpayment.
HMRC have recorded webinars available which can be viewed at any time on several topics such as: apprentices, common NMW issues, elements of pay, what counts as working time and salary sacrifice on our channel.
If HMRC finds that an employer has underpaid the minimum wage, any arrears have to be paid back immediately. There will also be a fine of 200% and offenders might be publicly named.
Have you identified an issue after reading this?
There are no penalties or naming if employers repay arrears before HMRC opens a compliance check.
Here is how to rectify NMW issues:
- Change working practices going forward.
- Calculate the arrears due to workers using the current rates.
- Pay arrears back to workers
- Make reasonable attempts to contact any affected ex-workers
If, as a result of a self-review, you have identified and paid arrears for underpayment of minimum wage, then there is an option to inform HMRC.
To request a copy of the form to be used for making a voluntary declaration email [email protected]. There are no public naming or financial penalties associated with any paid arrears that are declared to and accepted by HMRC using the voluntary declaration process.
To help you get things right, please refer to the information below:
Calculating the National Minimum Wage guidance
If you prefer to speak to someone about this, you can call ACAS for advice on 0300 123 1100.