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National Minimum Wage (NMW) – what you should know.

Friday, October 5th, 2012

It is that time of year again when the NMW is up for review.  From 1 October 2012 the rates will be as follows:

  •  The standard adult rate (workers aged 21 and over) will be £6.19.
  •  The development rate (workers aged between 18 and 20) will be £4.98 (unchanged from last year).
  •  The young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices) will be £3.68 (unchanged from last year).
  • The rate for apprentices will be £2.65.

From 1 October 2012, the accommodation offset will be £4.82 each day.

As a reminder that the Government takes enforcement seriously we can report that Norman Lamb, Minister for Employment Relations, has publicly named Rita Patel, a Leicester hair and beauty salon owner, for failing to pay £3,361.22 in NMW to a former worker following an investigation by HM Revenue and Customs (HMRC). HMRC enforced the debt through the courts.

Government argues that bad publicity is a deterrent for an employer who would otherwise be tempted not to pay the NMW.

The Dept for Business Innovation and Skills (BIS) introduced a scheme to name employers who flout minimum wage law on 1 January 2011; Mrs Patel is the first employer to be named.

An employer must meet one of seven criteria to be named. The criteria are that there is evidence that the employer:

  • knowingly or deliberately failed to comply with their NMW obligations
  • previously received advice from HMRC about the steps they need to take to ensure future compliance with NMW which they have not complied with
  • failed to take adequate steps to keep or preserve NMW records
  • delayed or obstructed a NMW compliance officer in the performance of their duties
  • refused or neglected to answer a NMW compliance officer’s questions
  • refused or neglected to provide information or produce documents to a NMW compliance officer, or
  • refused or neglected to pay arrears of the NMW to workers, following HMRC intervention, which has resulted in HMRC taking action against the employer to ensure payment of arrears to workers.

HMRC will not refer cases to BIS unless the total arrears owed to workers are at least £2, 000 and the average arrears per worker are at least £500.