Common NMW Risks

Following on from last month’s article on the Government’s naming and shaming method of enforcement for employers who do not pay the national minimum wage to their workers, the latest list of employers who have breached the law has been published by the Government. Latest “Naming and Shaming” exercise The Government has publicly named the largest list of employers who have failed to pay workers the legal minimum wage. The list is made up of 197 companies owing £465,291 in total. Since the tougher scheme of ‘naming and shaming’ was introduced in October 2013, nearly 700 employers have been named with total wage arrears calculated at more than £3.5 million. Getting It Right It may not be so surprising that the largest number of employers being named and shamed has occurred shortly after the introduction of the National Living Wage (NLW) rate. Since April 2016, workers who are aged 25 or over are entitled to the NLW, currently £7.20 per hour, whilst other workers remain entitled to the NMW rate based on their age. The large numbers failing to pay the correct minimum wage appears to show that employers may still be unaware of the new right to receive NLW or have failed to correctly amend wages for relevant workers. Common Themes In the care sector, the current highest area of risk of underpaying NMW is with sleep in shifts. There have been a couple of tribunal cases over recent years which have indicated that the hours spent asleep during a sleep in shift will attract NMW. Whether this will apply or not depends significantly on the facts of the case, including whether or not the worker lives at the place of work. There is, therefore, no blanket answer to this and so specific advice should always be taken. The situation with travelling between jobs is a little more straightforward but is still an area where employers can trip up. Where workers travel from one job e.g. one domiciliary care visit to another, that time counts as ‘work’ and therefore needs to be factored into the working time for which NMW is payable. Deductions for uniform, for example, can also have an effect on NMW pay and may result in an overall underpayment for the worker. Care Sector Lead Consultant, Lorna Stafford, urges employers to get in touch with the Advice Service “Many different deductions from wages can have the potential to affect the NMW calculation. The legally required ones, like tax and national insurance don’t make any difference but others, such as for a uniform, can result in an underpayment even if it is contractually allowed.”

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