During the year to 31 March 2017 HMRC received over 5,000 reports of suspected underpayments of National Minimum Wage, this is up from 2,513 the previous year. Employers need to be aware that the Government has committed £25.3m for minimum wage enforcement in 2017/18 and launched an awareness campaign for workers. If an employer is found to have been underpaying workers they face penalties of up to 200% of the arrears owed, up to £20k per worker.
According to tax investigations expert Paul Noble of Pinsent Masons, the increase in underpayment reports from whistleblowers to HMRC and Acas may be owing to the number of workers falling within the scope of the National Minimum Wage rising from 1m to 1.6m people, and the introduction of a new online complaints process which makes it easier for people to raise concerns.
The National Living Wage was introduced in 2016 and raised pay from £6.70 to £7.20 per hour, and then to £7.50 per hour last year for workers aged 25 or over.
If you are in any doubt about your responsibilities as an employer please contact us at Payroll Masters. We can help and advise you on all aspects of employing people.