National Minimum Wage mistakes

There are several traps employers can fall into which results in employees not receiving the national minimum wage. We have explored some of these below:

1. Salary sacrifice

Many employers operate salary sacrifice schemes for pensions, childcare vouchers or cycle-to-work schemes. Employers need to prevent staff from sacrificing too much pay that they then drop below NMW.

2. Insufficient records

Workers are entitled to be paid at least the NMW for all time they actually spend working. Rotas often record the number of shifts allocated, but not actual hours worked.

3. Not uplifting pay

Apprentices aged under 19, or who are 19 and over and in the first year of their apprenticeship, are only entitled to the apprenticeship rate for NMW. Once the apprentice is aged 19 and in the second year of their apprenticeship, they move onto the normal rates of NMW. This can result in a significant underpayment, however, many employers forget this or age-related uplifts because their systems don’t always issue reminders.