Do you have workers or employees on a salary which is on or close the National Minimum Wage (NMW)? Did you know that if a worker’s salary is close to the NMW and you pay them monthly, there is a chance you could be dropping them below the NMW within certain pay reference periods?
In accordance with NMW, the minimum you can pay a worker is the NMW multiplied by the number of hours worked that month. If you pay a salary; the same amount each month regardless of the number of hours worked that month, then in the longer working months there is the potential to drop the worker below the NMW within that pay reference period. HMRC won’t necessarily take into account that the worker may have benefited in other months and so, if found, you may be at risk of breaching the NMW.
If you are reported, or you end up with a HMRC investigation, the penalties for not paying the NMW are fines to a maximum of £20,000 per worker as well as being publicly named and shamed as well as being banned from being a Company Director for up to 15 years.
There are various options available to avoid breaching the NMW in this way. If you’re business requires some help and support, please get in touch with me today on 01223 855441.
About Aspire HR
Headquartered in Cambridge, UK Aspire HR make Human Resources available and affordable to all companies no matter how small. Few businesses can afford a full time HR professional.
Aspire HR is your flexible HR manager; here to help you protect your business, leaving you to concentrate on what you do best – run your business. We help businesses to grow and be profitable, and we look to partner with you to build strong long-standing relationships.
Get in touch with our CIPD accredited HR Consultants today on 01223 855441.