7th April 2014

Excuses, Excuses, Excuses!

Joshua Blake/Getty Images
Joshua Blake/Getty Images

Not quite “the dog ate my homework”…but almost! 

My colleague Cheryl recently highlighted the increased National Minimum Wage (NMW) thresholds which will be applicable from 1 October 2014.

Employers who fail to pay their staff the appropriate rate of NMW run the risk of facing penalties of up to £20,000 (in addition to claims for unpaid wages).

Her Majesty’s Revenue and Customs (HMRC), who are responsible for enforcing NMW, recently announced a list of the ten worst excuses given by employers who default on NMW obligations.

Among the weird and wonderful excuses included one employer who alleged that the staff did not get minimum wage because they did not speak English (arguably this would be discriminatory as well as to breaching the NMW regulations).  Another employer claimed that its employees were happy being underpaid because they were gaining experience (for an interesting discussion on this point see Cheryl’s blog about fashion interns from last week).  One employer indicated that it was not a conscious decision to underpay its staff but explained that they had never been asked by any employee to pay minimum wage (for the avoidance of doubt, an employee does not have to ask to enjoy the benefit of NMW – it is automatic!).

In 2013/14, HMRC’s investigations resulted in over 26,000 employees getting a share of £4 million in back pay.

Employers should always observe the NMW regulations and this publication by HMRC serves as a timely reminder that they are proactive in taking action against those employers who breach the rules.

Jack Boyle
Senior Solicitor – Employment Law

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