Minimum wage underpayments to be named and shamed again

By Emily Hawkins contact

- Last updated on GMT

Admin errors: a trade body said it is concerned businesses will be caught out even under a reformed system
Admin errors: a trade body said it is concerned businesses will be caught out even under a reformed system

Related tags: Wage

Pub companies that fail to pay their staff national minimum wage face being named and shamed, with ministers pledging to publish regular lists of non-compliant employers.

Changes to wage regulations will mean rogue companies are called out while the process is made easier for pubs that mistakenly underpay staff due to administrative errors, the Government said.

Previously, companies that underpaid by £100 could have been named but under new rules this threshold has been raised to £500.

Businesses who have underpaid staff by £500 will still have to pay back workers and could face fines of up to 200% of the arrears.

‘Salaried hours workers’ – who have different pay cheques each month dependent on how many hours they have worked – can now be classified as salaried workers.

This means, from April, employers will be able to use additional payment cycles and choose the ‘calculation year’ for staff.

Legal requirement

UKHospitality welcomed the moves but said there was still potential for employers to end up in hot water through administrative errors.

UKHospitality chief executive Kate Nicholls said: “There is no excuse for deliberately paying staff below the national minimum wage. It is a legal requirement and it is good to see the Government cracking down on rogue employers and highlighting the point that non-compliance is not acceptable.

“The proposals around the definition of salaried workers will help to reduce inadvertent errors by recognising the different ways in which people like to get paid in the 21st century. We look forward to working with Government and employee representatives to make sure these new rules work for everyone.

“We believe more needs to be done to totally rule out administrative errors, though. Some businesses have been caught out by admin errors in the past, rather than through deliberate underpayment. 

“We have made this point clear to the Government previously and highlighted the potential for employers to make honest mistakes on issues like accommodation offset or staff uniforms. The focus should be on tackling those businesses who knowingly underpay.”

No ifs, no buts

UKHospitality called on the Government to issue sector-specific guidance to help hospitality employers understand their legal obligations.

Business Minister Kelly Tolhurst said: “Anyone who is entitled to the minimum wage should receive it – no ifs, no buts – and we’re cracking down on companies that underpay their workers.

“We also want to make it as easy as possible for employers, especially small businesses and those trying to do right by their staff, to comply with the national minimum wage (NMW) rules, which is why we’re reforming regulations.”

Employers offering salary sacrifice and deductions schemes will no longer face fines if these schemes bring staff payment below the NMW rate. 

However, deductions for uniform and other items or services linked to someone’s job role that take staff payment below NMW are still subject to penalties.

Related topics: Legislation

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