Preventing minimum wage mix-ups
From 1st April 2019, the national minimum wage amount increased.
The precise change in required hourly wage varies by age, and whether or not the job is the first year of an apprenticeship. Details are below:
The National Living Wage (for those over 25)
£7.83 changed to £8.21
The National Minimum Wage (age bracket: 21 – 24)
£7.38 changed to £7.70
The National Minimum Wage (age bracket: 18 – 20)
£5.90 changed to £6.15
The National Minimum Wage (age bracket: under 18)
£4.20 changed to £4.35
The National Minimum Wage (First year apprentice)
£3.70 changed to £3.90
These are the new minimum wages that businesses need to pay eligible staff from now until the next official change. (See here for guidance on who is eligible.)
In 2018, over one and a half million people were on the minimum wage. Despite this wage being very widespread, especially in the retail and hospitality industries, many businesses find themselves underpaying their staff. In the 2017 – 18 year, the government discovered that 200,000 workers missed out on a record total of £15.6m.
The industries most likely to underpay were social care, commercial warehousing and the gig economy, according to HMRC.
Fines for doing this can be as much as 200% of the actual underpayment.
This is not just a problem for small and inexperienced companies; well-known companies and brands who have fallen foul of this regulation include Wagamama, TGI Fridays, Card Factory, Odeon and Costa Coffee.
Part of the reason for so many underpayments is because it is not as simply as deliberately shaving pennies off a paycheque. Common reasons for violating these national minimums include deducting uniform costs from wages (including making employees provide their own clothes), not paying for travel time, not increasing apprentice pay when necessary, or using the wrong time period to calculate the amount required.
In a statement to HR media website People Management, the head of reward and policy at CIPD, Charles Cotton, said,
“It would be helpful to receive more feedback from HMRC alongside these lists, giving not only the top reasons for undercutting wages but outlining the common mistakes made by companies that have been fined, whether it’s not gathering enough data or failing to update their payrolls regularly,” he said.
Time and Attendance UK’s Workplace Management System Helps Monitor Your Minimum Wage Compliance
Our system can help you to fix both of the problems named by Charles Cotton: gathering data and regularly updating payroll.
Whether staff use a contactless smartcard, their fingerprints, or the web browser and mobile app Self Service Module to clock in, the data is sent straight to the central Tensor.NET database.
Once the data is in the system, you can use our report wizard and advanced report customising settings to create detailed reports on employee working hours, or simply export the clocking data in formats compatible with all leading payroll systems.
The software calculates the National Living and Minimum wages based on time worked, and will send you alerts if a violation would occur on a planned shift. It can separate ‘worked time’ into different overtime rates, can calculate flexitime balance, and can even insert breaks if employees forget to clock out for them.
If you are interested in keeping track of your attendance data and being able to use the information in many different ways to benefit your business, then please contact us for more information.