Issue 147 web

Designer fabrics, made
to measure curtains
and blinds, alterations,
soft furnishings, made
to measure foam,
haberdashery, reupholstery,
fitting service,
FREE measuring
& quotation service.
120-122 Monnow Street,
NP25 3EQ
01600 775531
Common Mistakes in National Minimum Wage Compliance
In June 2023, the UK Government identified 202 employers who had failed to pay their staff the legal minimum wage. This breach affected approximately 63,000 workers across
a range of businesses, from major brands to small enterprises. The government’s message is clear: all employers must adhere to the statutory minimum wage regulations.
To ensure proper compliance and fair compensation for employees, businesses must be aware of the following common mistakes:
1. Failure to implement new rates: The primary reason for underpayment is neglecting to apply the annual minimum wage rate increase, which occurs every 1st of
April.
2. Overlooking birthdays: Underpayments often occur when employers miss employees’ birthdays, causing them to move from one rate to another.
3. Inappropriate payment of apprentice rates: Only apprentice under the age of 19 or in their first year of apprenticeship are eligible for the reduced
apprenticeship rate.
4. Misuse of the apprentice rate: Recognized apprentices must be engaged under a contract of apprenticeship and undergo structured training.
5. Failure to pay for working time: Determining which time should be paid, such as travel time, training time, and on-call time, can be challenging and
requires consultation with relevant case law.
6. Neglecting payment for additional time: Employers must ensure that they compensate employees for additional time worked, such as clearing
security checks or clocking in/out.
7. Including non-National Minimum Wage-countable payments: Employers commonly make the mistake of including pay elements, such as
tips, overtime payments, expense reimbursements, and wage advances, that do not count towards the minimum wage calculation.
8. Deductions: Deductions for job-related items or expenses, including safety clothing, uniforms, safety boots, and tools, reduce the
employees’ average hourly pay below the National Minimum Wage.
9. Accommodation offset: Charging workers more than the offset rate for living accommodation can lead to non-compliance, and
will impact NMW calculations.
10. Mistaken exemption from NMW: Exemptions include members of the armed forces, certain company directors, and
voluntary workers who receive no monetary payments or benefits in kind, apart from reasonable expense reimbursement.
To ensure compliance with the National Minimum Wage regulations, employers should consult local advisors to maximize
tax savings through applicable schemes.
Get in touch with your local advisor to discuss National Minimum Wages compliance
David Seymour
Senior Manager
Monmouth
david.seymour@azets.co.uk
Bryony Lewis
Assistant Manager
Monmouth
bryony.lewis@azets.co.uk