Understanding and Enforcing Minimum Wage Laws in the UK

February 28, 2024

It’s a legal requirement for employers to adhere to the National Minimum Wage (NMW) or National Living Wage (NLW), depending on the individual’s age and employment status.
From 1 April 2024, workers aged 21 and over will be entitled to the National Living Wage.

• 21 and over: £11.44
• 18 to 20: £8.60
• Under 18: £6.40
• Apprentice: £6.40

1. Compliance with Minimum Wage Laws

Employers are obligated to pay at least the National Minimum Wage or National Living Wage, depending on the individual’s age and employment status. Furthermore, they must maintain accurate records of employee pay and be prepared to provide them upon request.
If an employer discovers they haven’t paid the correct minimum wage, they should rectify the issue promptly, including addressing any backdated non-payments, even for former employees.

2. Informal Resolution of Wage Disputes

Often, wage disputes can be resolved informally through dialogue between the employer and the employee. Tools such as the National Minimum Wage and Living Wage calculator on GOV.UK or reviewing payslips and contracts can help verify proper payment.

3. Formal Procedures for Non-Payment

If informal resolution fails, employees have formal avenues for addressing non-payment issues. This can involve filing a grievance or making a complaint to HM Revenue and Customs (HMRC). In severe cases, employees may escalate the matter to an employment tribunal.

4. HMRC Enforcement of Minimum Wage

HMRC plays a crucial role in enforcing minimum wage laws. Individuals can lodge complaints anonymously, and HMRC can take various actions against non-compliant employers, including issuing fines and legal proceedings.

5. Making a Claim to an Employment Tribunal

Employees have the option to file a claim with an employment tribunal if they haven’t been paid the minimum wage. However, they cannot pursue both an HMRC complaint and a tribunal claim for the same issue simultaneously. There are specific time limits for submitting claims, depending on the circumstances.

6. Protection Against Retaliation

Employees are protected against retaliation for asserting their rights to minimum wage. Employers cannot subject them to detriment, such as reducing hours or withholding opportunities, for seeking fair pay.

7. Businesses Ordered to Repay £16 Million in Wages

Several businesses have been instructed to repay £16 million in underpaid wages and fines after failing to meet the national minimum wage requirements for their employees. According to HMRC data, 172,000 workers were affected by underpayment, with 524 companies found to be in violation. Notable names such as Greggs, Estee Lauder, and EasyJet were among the offenders, although they claim to have promptly addressed the issue upon notification.

The top 10 worst offenders collectively owed £9,969,434, with one company owing over £5 million. Staffline Recruitment Limited failed to pay £5,125,270 to 36,767 employees between 2014 and 2018, resulting in an average underpayment of £139 per person.

Understanding and enforcing minimum wage laws is essential for upholding fair practices in the UK. By ensuring compliance and addressing violations promptly and appropriately, both employers and employees contribute to a fair and equitable work environment. If employers would like advice or a national minimum wage audit completed, get in touch with our Payroll Director, Jessica Haunch, here.

Jessica Haunch

Jessica is our Payroll Director who has built up over 11 years of experience within the Payroll industry.  She leads our payroll department which is a national function that is strategically placed across all of our offices.

Jessica is responsible for ensuring her team works efficiently and accurately while maintaining compliance with all relevant regulations.

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