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National Minimum Wage Increase

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If you currently pay your staff the NMW you will need to read on to ensure you remain compliant.

Get it wrong and you could be fined £20,000 per worker for underpaying the NMW.  However, according to the government over 80% of businesses are not aware of these potential penalties for not getting it right.

Don’t be one of the 53% per cent of bosses do not realise it can be a criminal offence not to pay the NMW; or the 64% that do not know you may have to repay workers that have been underpaid; or the 65% that are ignorant of the fact that if you fail to pay NMW you could be publicly named and shamed.

What is the new NMW?

The new rates are as follows:

  1. a)    The standard (adult) rate (workers aged 21 and over) will rise to £6.70 per hour.
  2. b)    The development rate (workers aged between 18 and 20) will rise to £5.30 per hour.
  3. c)    The young workers rate (workers aged under 18 but above school leaving age who are not apprentices) will rise to £3.87 per hour.
  4. d)    The rate for certain apprentices (those under 19 years of age or those aged 19 and over but in the first year of their apprenticeship) will rise to £3.30 per hour.

Whilst this sounds straightforward, there can be complications with work experience students and ‘interns’.

How can you stay the right side of the law with the NMW?

Here’s a quick checklist to help you:

  • Make sure you pay the NMW at the correct rate to all employees entitled to it. Check with your payroll department to ensure that all employees’ are receiving the NMW or above.
  • Identify any work experience students or ‘interns’ in your organisation and assess the type of work they are asked to perform whilst they are at your organisation.  If they are doing ‘proper’ work, the NMW may apply.
  • Depending on the outcome of the assessment above, it may be that you need to re-evaluate your organisation’s strategy in relation to taking on work experience students and ‘interns’.  This may include evaluating the type of work given to them or whether your organisation wishes to continue with such schemes.
  • Consider keeping records of agreements that the organisation makes with the work experience student or ‘intern’, the tasks they are asked to perform and the hours they are asked to work. This will be a useful “paper-trail” if they attempt to bring a claim against you for failure to pay them the NMW.

If you require tailored advice or would like to discuss a legal concern you may be faced with, please do not hesitate to contact  any member of the Employment Law team on 01332 227 595.

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