NMW naming and shaming is back
Policy history. In October 2010 the government adopted a policy of publicly naming and shaming businesses that breached national minimum wage (NMW) laws. The purpose of this policy was to ensure NMW compliance but was suspended pending a formal review. It’s now been confirmed that it will resume on 6 April 2020 .
Rule change. Under the old scheme, any business which had NMW arrears of £100 or more could find itself named on the public register. When it comes back into force, the NMW arrears threshold will be raised to £500. This is across your entire workforce, not NMW arrears per employee. Where a business exceeds the £500 threshold, honest mistakes won’t get you off the hook - you can still be named and shamed for this type of error.
Why the increase? The arrears threshold has been raised to £500 to avoid businesses falling foul of the rules due to small amounts. Provided minor errors are rectified immediately, and all outstanding sums are paid to affected workers, the business won’t be publicly named and shamed.
Tip. You can avoid getting caught out by ensuring that you pay your staff the appropriate NMW rate for their age and action all rate changes immediately. A delay could be costly.
New rates. From 1 April 2020 the NMW rates are: £8.72 p.h. for workers aged 25 and over; £8.20 p.h. for workers aged between 21 and 24; £6.45 p.h. for workers aged between 18 and 20; £4.55 p.h. for workers aged under 18 but above school leaving age; and £4.15 p.h. for apprentices aged under 19, or those aged 19 or over and in the first year of their apprenticeship.
Tip. It’s not clear if NMW errors which arose when the scheme was suspended will be disregarded. Our advice is don’t take any chances - audit your historical NMW payments and rectify any arrears.
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