National Minimum Wage investigations have drastically increased
National Minimum Wage (NMW) problems throughout the UK are frequently the subjects of investigations by HM Revenue and Customs (HMRC). According to research that focuses on HMRC’s data, the department has increased investigations into employment practices and pay recently.
These inspections rose due to modern slavery reports and other controversial probes into UK garment factories.
To guarantee that workers are paid correctly, HMRC regularly uses its authority to conduct civil investigations. However, in more extreme cases, advanced measures are put into place.
For example, if an employer refuses to cooperate with HMRC and has been non-compliant, HMRC can launch a criminal investigation into the infringement.
Additionally, these investigations can initiate if a large proportion of the public has taken an interest in persecuting an employer for breaching employment laws.
Currently, the NMW is as follows:
- Apprentices – £4.15
- Under 18s – £4.55
- 18 to 20 – £6.45
- 21 to 24 – £8.20
- 25 and over £8.72
According to this research, NMW investigations increased from 2,807 (2018) to 3,561 in 2019. Moreover, the location with the most NMW probes was Aberdeen, with 10.2 being conducted per 100,000 population. The locations next in line, with a high number of investigations, are as follows:
- Blackburn – 9.8
- Birmingham – 9.6
- Belfast – 9.1
- Leicester – nine
Investigations such as these can be costly for employers. Penalties can reach up to 200 per cent of arrears owed to workers – which is a maximum of £20,000.
£17.1 million worth of 1,008 penalties were imposed by HMRC in 2018, which is an increase from £14.1 million worth of 810 penalties in 2017.
What actions can employees take?
If an employee believes they have been underpaid the NMW, they have the right to ask for and make copies of their payment records. With these copies, employees can then take the issue to HMRC, who will conduct their civil investigations.
What actions should employers take to prevent penalties?
Many employers breach the NMW rules accidentally, due to unforeseen complications with the rules, the research suggests. Therefore, it is essential for employers to continually review their payment practises and self-correct any errors to decrease their chances of being fined.
If you would like to discuss minimum wage requirements and any matters relating to wages, please contact our Payroll team on 01494 552100 email@example.com
This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at time of publishing (18th September 2020).