On 5 August 2021, the Department for Business, Energy and Industrial Strategy (BEIS) published a list of 191 employers who had breached the national minimum wage legislation by underpaying their staff. The list identified a number of large companies who had paid their staff below national minimum wage, with a collective total of £2.1 million in underpayment of wages being identified in relation to 34,000 workers between 2011 and 2018. The BEIS have since confirmed that all employers on the list have repaid what they owed, and were fined a total of £3.2 million.
It is important to recognise that not all underpayments are intentional, but employers must be vigilant in order to ensure that they are abiding by the national minimum wage legislation.
The scheme exists to increase awareness of the legislation and to act as a deterrent to employers who may be tempted to underpay their workers. The scheme was paused in 2018 and a new ‘revamped’ scheme introduced in December 2020.
The BEIS have committed to providing guidance in relation to the most common types of breaches of the minimum wage legislation. The first list published under the new scheme, on 31 December 2020, highlighted that the most common breach arose from employers making deductions from workers wages which brought them below the relevant national minimum wage.
Focus on Apprentices
The latest list is accompanied by guidance in relation to apprentices. The scheme found that 19% of employers identified in the list had breaches in connection with apprenticeships. Given the relatively low number of employers who use apprenticeship schemes, this figure is not insignificant.
The report highlighted that the most common reasons for underpayment in respect of apprentices was due to incorrectly classifying certain workers as apprentices, and failures to amend apprentices pay at certain key points in their employment.
Employers should ensure that they meet the requirements in order to consider a worker to be an apprentice, and keep good records to ensure that their rate of pay remains correct, depending on how old the apprentice is and how far along they are in their apprenticeship scheme.
The BEIS have made clear that the obligation to ensure compliance with the national minimum wage legislation lies with the employer.
If you are concerned that you are being underpaid, or that you may be underpaying your workforce, please do not hesitate to get in touch with our team today.
