Underpayment of the National Minimum Wage
HMRC publishes a series of factsheets about the checks they carry out to ensure employers are paying workers at a minimum the National Minimum Wage (NMW) or the National Living Wage (NLW). The factsheets provide employers with information on the type of checks HMRC makes as well as the process for making an appeal via the Employment Tribunals.
During a visit HMRC are allowed to ask for:
- any information they think will show whether workers are being paid at least the NMW or the NLW;
- explanations of anything contained within records;
- any additional information they need to determine whether the NMW or the NLW has been paid.
There are penalties for employers that are found to have underpaid their workers and in some cases there may be criminal prosecutions. A new factsheet entitled Guidance Notes on the Notice of Underpayment (NMW FS3) has been published and includes information on the notice of underpayment issued to employers when employees have been underpaid. The notice also includes details of how any penalty has been calculated.
The NLW is currently set at £7.20 per hour for those aged 25 or over. The NMW continues to apply for those aged under 25. The current NMW rates are: apprentices £3.40 per hour, under 18s £4.00 per hour, 18 – 20 year olds £5.55 per hour and 21-24 year olds £6.95 per hour. The current NMW rates took effect on 1 October 2016.