National Minimum Wage Breaches

Where did major companies fall foul of National Minimum Wage breaches?

Earlier this year, the Government identified 202 Companies, including a number of major employers in the UK, who had breached National Minimum Wage (NMW) regulations in recent years.

The investigation found that the main causes of these breaches were due to incorrect deductions from employee’s pay, errors in calculating working time and paying the incorrect apprenticeship rate.

We have looked at the main causes of these breaches and how employers can avoid them:

Incorrect deductions from pay

It is important that any deductions to an employee’s wage don’t take their rate of pay below the NMW.

There are only certain situations whereby a deduction below NMW is lawful and these are set out on GOV.UK, which you can read more about by understanding your pay.

However, in general, employers must ensure that any deductions do not result in them falling below their NMW requirements.

Errors in calculating working time

There can be confusion as to what constitutes working time and it is therefore important that employers ensure the qualifications for working time are understood and measured appropriately.

Working times refers to times when the employee is at work and/or is required to be working or on standby near the workplace.

Working time includes where an employee is:

• Training and/or travelling to training;
• Awaiting repairs of work equipment but is required to remain at the workplace;
• Waiting for a goods delivery, to meet someone at work, or to start a job;
• Travelling between assignments or clients; or
• Working, with work-related responsibilities, even while the employee is allowed to sleep (sleep-in shifts).

However, working time does not typically apply where an employee is:

• Travelling between their home address and work (unless they are working during their commuting time, such as answering calls or emails while on public transport);
• Away on rest breaks, holiday, sick leave, or parental leave;
• On industrial action;
• Not working while at the workplace, or available for work, during a time when employees are allowed to sleep.

You can find further information from GOV.UK on working time, including examples, by clicking Minimum wage for different types of work.

Incorrect apprenticeship rate of pay

After completing the first year of their apprenticeship, any apprentice that is over the age of 19 years old should be transferred to the NMW for their appropriate age category.

As a result, employers are expected to be proactive and ensure that they are tracking the apprentice’s progress, and whether they would be eligible for this transfer to the NMW for their age range on completion of one years’ service.