You may already be aware of the recent rise in National Minimum Wage (NMW) and National Living Wage (NLW). Employers need to ensure they are paying their employees at least the appropriate rate.
HM Revenue and Customs (HMRC) officers have the right to carry out checks at any time and ask to see payment records. They can also investigate employers if a worker complains to them.
If HMRC finds that an employer hasn’t been paying the correct rates, any arrears have to be paid back immediately. On ** for apprentices under 19, or 19 or over and in the first year of their apprenticeship.
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.
* introduced and applies from 1 April 2016
**for apprentices under 19 or 19 or over and in the first year of their apprenticeship
Going forward the NMW and NLW rates will be reviewed annually in April.
BWB Accountants Surrey
First Floor, 5 Park Court, Pyrford Road, West Byfleet, Surrey KT14 6SD
tel 01932 350117