National minimum wage update
By Kevin McCavish
There have been a number of important developments recently with regard to the national minimum wage (NMW). As a result, employers would be well advised to review their pay rates to ensure all applicable workers are receiving at least the NMW.
An employer who is found to be paying its workers less than the NMW is issued with a notice of underpayment by HMRC and made to pay a penalty. For any pay reference period beginning on or after 7 March 2014, the maximum penalty has increased from £5,000 to £20,000 and the penalty percentage has increased from 50 per cent to 100 per cent of the underpayment (being the difference between the remuneration received by the worker and the NMW rate(s) that applied at the time they were underpaid). Where the amount of the penalty is less than £100, a minimum penalty of £100 will apply.
Where an employer’s underpayment falls before and after 7 March 2014, it will receive separate notices of underpayment for each period calculated using the relevant financial penalties for those respective periods…
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