Article by Jenna Bata LL.B. (Hons)
This is the second part of a two-part series. As an employer, you must be aware of the minimum payment required in order to ensure that you fulfill your responsibilities as an employer. The rates change annually on October 1st, when the Low Pay Commission reviews the rates. Minimum pay rates are intended to give a level playing field to employers, and therefore it is only right that you adhere to the rules.
Here are some top tips for employers:
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The National Minimum Wage has to be paid to employees for specific types of work. The main type is ‘time work’, where employees work for a specific number of hours – whether it is a daily contract, a contract for one week or for one month.
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Under the 2010 reforms, make sure that you pay all of your eligible employees aged 21 and above at the main rate of £5.93 per hour. Please note you have to pay employees this rate even if they have signed a contract agreeing to receive a lower rate.
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Employers should know all of the minimum pay rates for different bands of employees. These can be found here.
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Legally, Employers must keep sufficient records to show that their workers are receiving at least the minimum pay rate required. Payroll and business records will generally suffice for this purpose.
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The current law requires that records are kept for at least three years after the pay period following the one that the records cover. However, it is advisable to keep records for at least six years as a civil claim can be brought up to six years after the alleged failure to pay national Minimum Wage. If you need help with a civil claim brought against you, click here to find a solicitor to help you.
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Enforcement generally occurs through Her Majesty’s Revenue and Customs (HMRC), who send compliance officers to carry out compliance enquiries.
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It is important to note that the compliance officers do have the right to visit employers and check the Minimum Wage records as they please.
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It is a criminal offence to fail to do keep sufficient records, and you do not do this correctly, you could be fined.
As employers, in order to anticipate and prepare for any changes that need to be made within your organization, whilst also fulfilling responsibilities to your employees, it is important to always be aware of the Minimum Wage.
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