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Is my employer paying me correctly?

The national minimum wage guarantees that every workers is paid a minimum amount for an hour’s work. National minimum wage laws first came into force twenty years ago.


The legislation is enforced by HM Revenue & Customs (HMRC) and employers who get it wrong face big bills, not just in terms of back payments to workers but, also fines of up to £20,000 per worker affected and being “named and shamed” on HMRC’s website.


Unfortunately for employers, national minimum wage legislation is notoriously complex and its easy to mistakenly fall foul of it. HMRC has ruthlessly pursued employers who have technically breached the law – usually through ignorance or misunderstanding of the rules rather than a desire to deliberately underpay workers. Big high street names such as Iceland, Sports Direct and Wagamama have been prosecuted.


Although the government has said it will look to simplify the law in the future, for now the complicated rules remain. Some common areas where employers can breach the law and underpay workers are:

  • failing to implement the annual increase in rates in time (this took effect on 1 April, this year)
  • filing to move workers from one pay band to another when they have a birthday (for example, once a worker reaches 25 their hourly rate will go up from £7.70 to £8.21)
  • failing to recognise that they have to pay for time which is regarded as working time such as time spent waiting to start or finish work (for example, extra time spent queuing to clock off or be searched)
  • failing to recognise that some travelling time to and from different places of work must be paid at the NMW rate
  • deducting money for a uniform or work equipment which might push income below the NMW
  • deducting money as part of a salary sacrifice scheme which pushes income below the NMW (Iceland was fined running a Christmas club scheme where deductions were made straight from salary)
  •  failing to ensure that NMW is being paid for each “pay reference period” where pay is smoothed out through the year, for example, to deal with seasonal demand
  • difficulties around “on-call” or sleeping in time and whether this counts as working time which must be paid for


Check your payslip

From the 6 April, it will be much easier for workers to ensure that they are being paid correctly as employers will be required to give all workers (not just employees) an itemised pay statement. This must include the number of hours worked where pay varies as a consequence of hours worked.





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