Are your employees getting enough?
Minimum Wage Update - First Criminal Prosecution
A nursery owner in Walthamstow, East London, has been the first to face a criminal prosecution under the National Minimum Wage Act. On 28th August 2007, a fine of £3,000 was issued to the nursery's owner, Teresa Aguda, who prevented HM Revenue and Customs compliance officers from accessing staff records. Officers were trying to establish whether staff received minimum wage.
During the case, Judge Gott stated that Mrs Aguda had "demonstrated a clear and deliberate intent to obstruct officers and this was a scandalous breach of the National Minimum Wage legislation."
There are six potential offences under section 31 of the National Minimum Wage Act, each carrying a maximum fine of £5,000 and a criminal record. These are:
- Employer refuses or wilfully neglects to pay NMW
- Person fails to keep or preserve records
- Person knowingly causes or allows false entry in records
- Person produces or furnishes false records or information
- Person delays or obstructs compliance officer
- Person refuses or neglects to answer any questions or produce documents for compliance officer.
With this in mind, what do you need to be aware of? Laura Ceresale provides this brief summary.
The National Minimum Wage increases again on 1st October
The increased rates are as follows:
- The main rate for workers aged 22 and over is currently £5.35 an hour and will increase to £5.52
- The development rate for 18-21 year olds is currently £4.45 an hour and will increase to £4.60
- The development rate for 16-17 years olds is currently £3.30 an hour and will increase to £3.40
A Brief Background
The aim of the minimum wage since its introduction has always been to help set minimum standards in order to promote fairness at work, by ensuring workers receive a legal right to a standard rate, which is based on recommendations by the Low Pay Commission. The DTI believe that it also helps the creation of competition based on service and quality, rather than on low labour costs, promoting a fairer economy. Most 'workers' (including independent contractors), over 16 years old are eligible. Excluded groups include au pairs, family members in a business, voluntary workers and some apprentices.
Employer Records
As an employer, you must be able to show that you are paying wages that meet the requirements of the minimum wage rates. Records must be kept for three years and should be kept in the form of a single document for each worker. This information is required by compliance officers upon inspection.
What if an employee believes they are not being paid the minimum wage?
- Employees are entitled to see their employer's records, if they have reasonable grounds to think they have not been paid the minimum wage.
- If an employer does not provide records of their pay to show that they have been paid the minimum wage, they can go to an employment tribunal.
If you would like further information regarding the National Minimum Wage, please contact laura@hradvantage.co.uk.
