National Minimum/Living Wage Update

On 9 December 2021, the Department for Business, Energy and Industrial Strategy (BEIS) produced its latest list which ‘names and shames’ 208 employers who have failed to pay their staff the national minimum/living wage.

Employers named in this list, which is the eighteenth list published so far, range from multinational businesses to small companies and sole traders. The biggest surprise to us here at PSTAX is that this is the first list we can recall where a local authority has been included, in this case, a County Council. This is clearly a sign that no employer is exempt from the consequences of not paying their staff at the statutory rates.

Produced alongside the name and shame list by BEIS is an educational bulletin which provides further information on the most common reasons why employers have breached the NMW/NLW levels for their employees. We have spoken about these at many of our forums and so it was no surprise to see that the biggest proportion of cases noted relate to deductions from wages which have taken pay levels below the minimum. These deductions include areas such as savings schemes, childcare costs, the purchase of clothes to meet a dress code, attachment of earnings administration fees and salary sacrifice schemes, although this last case if it was the only breach, would not give rise to the naming and shaming.

Other areas of risk include unpaid working time (for training, travel, etc), apprentices (for ceasing apprenticeship – care needed here regarding furlough periods), failing to increase wages following a birthday, etc. One of the surprising areas noted was in relation to ‘worker status error’, where a worker has been incorrectly treated as self-employed.

PSTAX does offer clients an NMW/NLW review service to give employers the peace of mind that they are correctly complying with their legal obligations and to offer practical solutions in cases where errors may have been made.   If you are at all concerned about any of the risk areas mentioned above, are interested in finding out more information about this review service, or would just like some further information about NMW/NLW, please do not hesitate to contact:

Angela Ferguson

Tim Bridgett

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Angela Ferguson

Written by Angela Ferguson

Angela has spent close to 30 years within taxation, having trained within the big 4 for most of her career. She spent 10 years at EY as a Director in their Manchester office managing the Employment Tax and NMW teams. Prior to joining PSTAX Angela was the Head of Employment Taxes at Saffery Champness for 3 years, growing and developing the team and service line for the firm.

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