The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald

The latest Clay Shaw Butler Money Matters column from the Carmarthenshire Herald.
By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.

The Government has revealed 10 of the most bizarre excuses used by unscrupulous business owners who have been found to have underpaid workers the NMW (the national minimum wage).
These employers used excuses such as ‘only wanting to pay staff when there are customers to serve and believing it was acceptable to underpay workers until they had ‘proved’ themselves’.
The Government has launched an awareness campaign to encourage workers to check their pay to ensure they are receiving at least the statutory minimum ahead of the NMW and NLW (national living wage) increases on 1 April 2017.
Employers need to ensure they are paying their employees at least the NMW and NLW.
This will be the second increase in six months for the NMW rates.
Going forward the NMW and NLW rates will both be reviewed annually in April.
In a recent article in the Employer Bulletin, HMRC cite common errors:

• not paying the right rate, perhaps missing an employee's birthday, 
• making deductions from wages which reduce the employee’s pay below the NMW/NLW rate, 
• including top ups to pay that do not qualify for NMW/NLW, 
• failure to classify workers correctly, so treating them as interns volunteers or self employed and 
• failure to include all the time a worker is working, for example time spent shutting up shop or waiting to clear security. 

What are the penalties for non-compliance?
The penalties imposed on employers that are in breach of the minimum wage legislation are 200% of arrears owed to workers.
The maximum penalty is £20,000 per worker.
The penalty is reduced by 50% if the unpaid wages and the penalty are paid within 14 days.
HMRC also name and shame employers who are penalised.
The Government’s latest £1.7 million campaign aims to make sure workers are being paid at least the National Minimum Wage, or National Living Wage, depending on their age, and is part of a commitment to making sure the economy works for all.
The Top 10 excuses for underpaying staff were –

1. The employee wasn’t a good worker so I didn’t think they deserved to be paid the National Minimum Wage. 
2. It’s part of UK culture not to pay young workers for the first three months as they have to prove their ‘worth’ first. 
3. I thought it was OK to pay foreign workers below the National Minimum Wage as they aren’t British and therefore don’t have the right to be paid it. 
4. She doesn’t deserve the National Minimum Wage because she only makes the teas and sweeps the floors. 
5. I’ve got an agreement with my workers that I won’t pay them the National Minimum Wage; they understand and they even signed a contract to this effect. 
6. My accountant and I speak a different language – he doesn’t understand me and that’s why he doesn’t pay my workers the correct wages. 
7. My workers like to think of themselves as being self-employed and the National Minimum Wage doesn’t apply to people who work for themselves. 
8. My workers are often just on standby when there are no customers in the shop; I only pay them for when they’re actually serving someone. 
9. My employee is still learning so they aren’t entitled to the National Minimum Wage. 
10. The National Minimum Wage doesn’t apply to my business. 

By law, all workers must be paid at least £7.20 an hour if they are aged 25 years and over, or the National Minimum Wage rate relevant to their age if they are younger.
Business Minister Margot James said: “There are no excuses for underpaying staff what they are legally entitled to. This campaign will raise awareness among the lowest paid in society about what they must legally receive and I would encourage anyone who thinks they may be paid less to contact Acas as soon as possible.
“Every call is followed up by HMRC and we are determined to make sure everybody in work receives a fair wage.”
Workers are encouraged to regularly check their pay to ensure they are receiving at least the minimum or living wage, depending on their age.
For more information and to report underpayment, visit
www.gov.uk/national-minimum-wage
or contact Acas for free and impartial advice –
http://www.acas.org.uk/
From 1 April 2017:
The National Living Wage rate for those aged 25 years and over will increase by 30p to £7.50 per hour
For the National Minimum Wage

• the rate for 21 to 24 year olds will increase by 10p to £7.05 per hour 
• the rate for 18 to 20 year olds will increase by 5 to £5.60 per hour 
• the rate for 16 to 17 year olds will increase by 5p to £4.05 per hour 
• the apprentice rate will increase by10p to £3.50 per hour 

The new rates were been recommended by the independent Low Pay Commission after careful consideration of evidence from both workers and employers.
HMRC’s enforcement budget was increased from £13 million to £20 million in April 2016, increasing the number of compliance officers available to investigate NMW complaints.
An additional £4.3 million in enforcement funding was announced in the last Autumn Statement.

You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) - http://www.clayshawbutler.com/news/latest-news-for-business
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