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The strangest excuses for not paying the National Minimum Wage

The Department for Business Energy and Industrial Strategy has published a list of the strangest excuses for underpaying National Minimum Wage.

Investigators from HMRC have revealed some of the worst excuses given to them by employers caught out for underpaying staff, which include:

1. The employee wasn’t a good worker so I didn’t think they deserved to be paid the National Minimum Wage.
2. It’s part of UK culture not to pay young workers for the first 3 months as they have to prove their ‘worth’ first.
3. I thought it was ok to pay foreign workers below the National Minimum Wage as they aren’t British and therefore don’t have the right to be paid it.
4. She doesn’t deserve the National Minimum Wage because she only makes the teas and sweeps the floors.
5. I’ve got an agreement with my workers that I won’t pay them the National Minimum Wage; they understand and they even signed a contract to this effect.
6. My accountant and I speak a different language – he doesn’t understand me and that’s why he doesn’t pay my workers the correct wages.
7. My workers like to think of themselves as being self-employed and the National Minimum Wage doesn’t apply to people who work for themselves.
8. My workers are often just on standby when there are no customers in the shop; I only pay them for when they’re actually serving someone.
9. My employee is still learning so they aren’t entitled to the National Minimum Wage.
10. The National Minimum Wage doesn’t apply to my business.

These excuses are not only problematic from a national minimum wage point of view, in some cases they are in breach of the Equality Act 2010: not paying the national minimum wage to “young workers” is age discrimination, paying “foreign workers below the national minimum wage” is race discrimination. (Sadly, being the employee who makes the teas and sweeps the floor is not a protected characteristic under the Equality Act.) If one of these employees were to take their employer to an employment tribunal and win, the award could be considerably higher than the wages they should have paid as there is no cap on awards for equality act claims.

From 1 April 2017 the National Living Wage rate for those aged 25 years and over will increase by 30p to £7.50 per hour. For the National Minimum Wage the rates will also increase:

– 21 to 24 year olds will increase by 10p to £7.05 per hour
– 18 to 20 year olds will increase by 5 to £5.60 per hour
– 16 to 17 year olds will increase by 5p to £4.05 per hour
– the apprentice rate will increase by 10p to £3.50 per hour

In the BEIS press release Business Minister Margot James said:
There are no excuses for underpaying staff what they are legally entitled to. This campaign will raise awareness among the lowest paid in society about what they must legally receive and I would encourage anyone who thinks they may be paid less to contact Acas as soon as possible.

Every call is followed up by HMRC and we are determined to make sure everybody in work receives a fair wage.

Make sure your clients understand the importance of paying the national minimum wage and national living wage to avoid employment tribunal claims and penalties imposed by HMRC

For more information visit www.gov.uk/national-minimum-wage or contact Acas for free and impartial advice (www.acas.org.uk).