HMRC crackdown on salaried contracts

Peninsula Team

November 07 2016

Do you have employees on an annual salary being paid at the National Minimum Wage (NMW) or up to £2.00 above it? If so we want you to contact us. HMRC are currently focusing on salaried staff’s contracts. They are reviewing whether contracts contain the correct criteria, acceptable to the HMRC, so the employee can be viewed as a “salaried worker” for the purpose of receiving the NMW. In order to meet this criteria, contracts of employment need to show the annualised hours of work. NMW rates increased for pay reference periods beginning on or after the 1st October 2016. The correct NMW and NLW rates that must be paid to all staff are: • For workers aged 25 years and over: £7.20 per hour • For workers aged 21 – 24 year olds: £6.95 per hour • For workers aged 18 – 20 year olds: £5.55 per hour • For workers over compulsory school age but not yet 18: £4.00 per hour • The apprentice rate (for apprentices under the age of 19 or 19 and over but in the first year of apprenticeship): £3.40 per hour Contact our Payroll Advice Line on 0844 892 2772 option 3 to check your compliance and gain additional advice on meeting National Minimum Wage requirements. Failure to comply with HMRC guidelines can lead to being named publicly, having to repay underpayments and substantial penalty fines. Alternatively, contact our documentation specialists on 0844 892 2496 to have a fully HMRC compliant salaried contract drawn up for salaried workers on, or close to, the NMW. Why not sign up to our National Minimum Wage webinar on Friday 25th November at 11am where this topic will be covered in more detail. To register for this webinar please e-mail Please note: responsibility for ensuring National Minimum Wage requirements are met is that of the employer and is not covered under the terms of our insurance scheme. Please do seek advice.

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