Understanding and complying with the latest minimum wage requirements is important to ensure you avoid facing penalties. Whether your employees are on zero hour contracts, casual workers or agency workers, most people who hold a job are entitled to be paid the minimum wage at the very least.
The importance of paying the National Minimum Wage was recently highlighted by the infamous retail giant, John Lewis. It has been documented that John Lewis has taken a £36 million deduction to its profits in order to pay back staff members after a misunderstanding of how to calculate the National Minimum Wage. The confusion meant that many employees were falling below the minimum wage threshold.
What is the Minimum Wage?
The NMW legislations states very clearly that the total remuneration in one pay period (ie. a month, if the employee is paid monthly) consists of the gross pay, plus any overtime, bonuses commissions and allowances (prior to standard deductions for income tax and National Insurance) minus other payments and deductions that do not count towards the NMW.
Categories of funds that do not count towards the minimum wage are: benefits in kind (whether or not they have a monetary value), redundancy payments, advances of wages, loans by the employer, pension payments, lump sum payments on retirement, tribunal or settlement awards and any premium paid for overtime or shift work.
Disputing the Minimum Wage
If you believe you are being paid below the minimum wage threshold, your first port of call should be to talk to you employer. Unfortunately, not all employers abide by lawful guidelines and if you believe you are being treated unfairly, you can make a claim for an employment tribunal.
Typically a claim must be made within 3 months of an employee leaving their place of work or within 3 months of the problem happening.
The team of employment solicitors at Broadbents Solicitors have a wealth of industry experience in dealing with employment law. If you have any queries related to the NMW or any other employment related issues, contact our specialist team by calling directly or using our online contact form.