Government poll discovers almost half of all businesses did not know it can be a criminal offence to underpay staff as October 1 wage increase kicks-in.
Three quarters of businesses surveyed in Yorkshire are unaware they could be fined £20,000 per worker for underpaying the National Minimum Wage (NMW).
Today (October 1) sees an increase in the NMW rates for almost all employees, including apprentices. However, many bosses are ignorant of the penalties for not paying it.
The nationwide survey of 1,000 businesses by the Department for Business, Innovation and Skills, asked businesses for their understanding and awareness of the NMW rate rise. Among companies in Yorkshire it found:
- 75 per cent of bosses surveyed did not know they can be fined up to £20,000 per worker for failing to pay the NMW;
- 44 per cent did not realise it can be a criminal offence;
- 55 per cent did not know they had to repay workers they had underpaid, and
- 52 per cent did not realise they could be publicly named and shamed
It is estimated there were nearly 1.5 million workers in the UK aged over 21 being paid on or below the NMW in 2014, according to a separate ONS Annual Survey of Hours and Earnings. This includes 140,000 people in the Yorkshire and Humber region, which is 7 per cent of the regional workforce and 10 per cent of the UK figure.
Today’s new rates are:
|YEAR||21 and over||18 to 20||Under 18||Apprentice|
|2015 (October 1)||£6.70
The three per cent increase in the rate for over 21s is the biggest real increase since 2006. A full time employee working 35 hours will see an additional £364 in their annual pay packets. The new apprentice rate will see apprentices receive £1,037 more in their pay.
Despite lacking knowledge on penalties, the good news is an overwhelming 86 per cent of Yorkshire bosses surveyed think the NMW is a good idea. More than a quarter currently employ people on the NMW.
A total of 84 per cent said they were aware of today’s rate increase, however only 30 per cent knew that the new rate for people aged 21 and over is £6.70. This was still higher than the survey national average of 26 per cent.
Bosses in Yorkshire also appreciate the positive effect on their business of paying the NMW.
More than 80 per cent of those surveyed said staff were more productive and loyal if paid at least NMW, while 78 per cent agreed that customers will do business with them again if they know that workers are receiving the right pay.
More than half of Yorkshire bosses surveyed (57 per cent) said that staff should come and speak directly to them if they had concerns about whether they were being paid the right rate.
The survey found that 45 per cent of Yorkshire respondents did not know of resources available to help them pay the right rates.
If you are not paying at least the NMW you are breaking the law.
If you are concerned about your current pay arrangement or want to check wage queries you can contact ACAS for free and impartial advice on 0300 123 1100 who can offer support in correcting any issues.
The penalty for not paying your employees at least the NMW that they are entitled includes a fine of up to £20,000 and your business could be publically named.
Don’t get caught out – for further advice and guidance visit www.gov.uk/national-minimum-wage.