Employment Update – National Minimum Wage Breaches ‘Name and Shamed’ by the Government

On the 21 June 2023 the Department for Trade and Business named a total of 202 companies who were faced with penalties from the Government for breaching the law on National Minimum Wage (NMW).

The new financial year saw NMW rates increase. The current NMW rates can be found on our website HERE.  Shortly after followed the published list of employers who failed to comply and/or had fallen short of the law.

The companies who were ‘named and shamed’ ranged from sole traders and small businesses, all the way up to major retailers. Among the top 5 were WHSmith, Lloyds Pharmacy, Marks and Spencer and Argos, who, between them, had failed to pay over £2.9 million to their workers.

This list acts as a reiteration that no employer in the UK is exempt from paying minimum wage to their workers. Whilst the majority of employers are certain that they do pay their employees the correct rate of pay, there are many instances where NMW breaches can occur unintentionally. In fact, one of the companies on the list (Buzz Bingo) contested that they have always paid their staff well above the NMW; it was in fact their time recording and unform policies that led them being amongst the ‘name and shamed.’

This has evoked conversation that NMW breaches arguably commonly come from more technical issues which, most of the time, are unintentional. It’s important for employers to understand what these issues are, and more importantly, how they can be avoided.

Most notably, employers need to be aware of the revised NWM and ensure they are paying staff the correct amount. However, employers should further be mindful of those instances that concern minimum wage outside of simply complying with the rates, such as:

• Tips being counted as part of pay
• Unpaid travel time
• Deductions to wages to cover costs of specific items, such as uniforms or tools.
• The rate of pay for those on apprenticeships.
• Not paying for Trial Shifts
• Not paying for Team Meetings/Training
• Rounding down ‘clock-in’ and ‘clock-out’ times.

The name and shame lists should act as a public reminder that payroll tasks are of key importance. As well as this, it is also important to consider those instances where breaches of NMW occur unintentionally and ensure business policies relating things such as uniform, time recording and travel times are compliant with the law.

If you have any questions on whether your business is complying with the NMW laws, please contact our Employment Team.