The number of whistleblower reports to HMRC over suspected underpayment of the national minimum wage more than doubled in 2017 as growing numbers of workers fell within its scope.
The introduction of the national living wage in 2016 raised pay from £6.70 to £7.20 per hour for employees aged 25 and over, increasing last year to £7.50, and extended the number of workers covered from one million to 1.6 million.
From April this year, those over 25 will receive a minimum of £7.83, with increases also planned for those under 25, those aged 21 to 24, 18 to 20 and apprentices.
But employers are also being caught out by the complexities of the rules, warns law firm Pinsent Mason, which cited the £1.5m fine on Argos last year for failing to take into account staff obligations including security checks and briefings before they clocked on when calculating pay. The retailer had to pay out a further £2.4m to correct staff wages.
Other common errors include deducting money from pay for uniforms, paying apprentice rates to workers, and failure to properly account for overtime and mistakes can affect salaried workers as well as hourly paid ones.
“This is a significant rise in whistle-blowing over the national minimum wage in just one year,” says Paul Noble, head of tax investigations at Pinsent Masons. “Employees are now increasingly knowledgeable about their rights and they’re ready to take action if they don’t think they’re being paid correctly for their time.”
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