Top minimum wage underpayment mistakes

The government has publicly named and shamed over 100 employers for failing to pay the correct minimum wage.

Whilst this list included some big hitters such as Tesco, many were small employers caught out with the nuances of the legislation.

So what did they get wrong?

From the information disclosed by HMRC, the main issues were:

• Making deductions that took pay below the NMW, e.g. for staff purchase schemes, paying for uniforms, Christmas savings schemes, salary sacrifice schemes, parking permits, personal protective equipment and mandatory training costs.
• Not paying workers for all time worked, e.g. additional hours worked before and after a worker’s shift and rounding up clocking-in time to the nearest hour.
• Failing to increase a worker’s pay when they became eligible for a NMW rate following a birthday.
• Incorrectly classifying a worker as an Apprentice when they are not on a formal Apprenticeship scheme.

Minimum Wage legislation is complex and it won’t make any difference if your employee authorises you in writing to make a deduction for any of the unlawful reasons.