Planning for the increased National Minimum Wages and common mistakes to avoid

Further to our recent article about NMW increases from April, we've put some further information together to help avoid common mistakes...

The new rates from April see increases of around 10%. Your lowest paid workers may get a pay rise because of this but a little thought needs to go into how workers currently paid over these rates will view their colleagues getting a pay rise if they don’t. This could see wage increase pressures put on employers across the board. This needs to be managed to keep costs under control and to review your sales pricing policy where necessary.

It is important to keep within the law where the minimum wages is concerned. Employers who fail to pay the minimum wage face being named and shamed by HMRC. Penalties of up to 200% of the arrears up to a maximum of £20,000 per worker can be levied in the most extreme cases. Some common mistakes are failing to change pay rates following a birthday, forgetting to update rates as they change, incorrectly classifying a worker as an apprentice and making deductions from pay which reduce income to less than the minimum wage.

We have received notice from HM Revenue & Customs that they are starting compliance work locally and will be writing to employers about the minimum wage. If you need any help to make sure your payroll complies, please do not hesitate to get in touch with Yvette, our payroll manager.