10 outrageous excuses for not paying National Minimum Wage
WH Smith, Marks & Spencer and Argos are among more than 200 firms that have failed to pay workers legal national minimum wage (NMW). The employers were found to have failed to pay their workers almost £5 million in a clear breach of NMW law, leaving around 63,000 workers out of pocket.
The employers named previously underpaid workers in the following ways:
- 39% of employers deducted pay from workers’ wages.
- 39% of employers failed to pay workers correctly for their working time.
- 21% of employers paid the incorrect apprenticeship rate.
Whilst not all minimum wage underpayments are intentional, there is no excuse for underpaying workers. However, some employers have tried the most outrageous excuses to justify their failure to pay their workers NMW.
And before you read these, I want to clarify that these are genuine excuses that employers have given to HMRC enforcement officers – not a single one is made up:
- “She does not deserve the NMW because she only makes the teas and sweeps the floors.”
- “The employee was not a good worker, so I did not think they deserved to be paid the NMW.”
- “My accountant and I speak a different language – he does not understand me, and that is why he does not pay my workers the correct wages.”
- “My employee is still learning so they are not entitled to the NMW.”
- “It is part of UK culture not to pay young workers for the first three months as they have to prove their worth first.”
- “The NMW does not apply to my business.”
- “I have got an agreement with my workers that I will not pay them the NMW; they understand, and they even signed a contract to this effect.”
- “I thought it was okay to pay young workers below the NMW as they are not British and therefore do not have the right to be paid it.”
- “My workers like to think of themselves as being self-employed and the NMW does not apply to people who work for themselves.”
- “My workers are often just on standby when there are no customers in the shop; I only pay them for when they are actually serving someone.”
For the avoidance of doubt – you must pay at least the NMW, and you cannot get staff to sign away their NMW rights.
An employment contract is unlike a business contract – if the terms contradict employment law, employment law overrules it. You cannot say, “Hah, you signed it, sucker”, and get away with it.
The NMW went up on 1 April (as it does every year), so make sure that you are paying your staff the correct amount from this date:
If HMRC finds that you have not paid the minimum wage, action they can take against you includes:
- issuing a notice to pay money owed, going back a maximum of 6 years;
- issuing a fine of up to £20,000 and a minimum of £100 for each employee or worker affected, even if the underpayment is worth less;
- legal action, including criminal legal proceedings;
- naming and shaming you on a public list.
And all of this could trigger an audit of all your accounts. No-one wants that!