In the last five weeks I've advised four employers on issues under the National Minimum Wage Regulations. Three of my clients didn't realise they had a problem until it hit them. Of course all these cases turn on their own facts but there are some points which have general application:
- the accommodation offset is limited to £35.56 per week or £154.09 per month. The open market value of most employers accommodation will be much higher but that counts for nothing;
- travelling between appointments is treated as working time so attracts the minimum wage. Travelling between the employee's home and the first and last appointments of the day is not regarded as working time;
- as a broad generalisation sleep-overs (for instance by carers and on-call workers) will usually be working time attracting the minimum wage;
- the regulations are complicated and HMRC doesn't always get it right. Challenging alleged breaches takes time but it's not a good idea to let them go uncontested, unless of course the complaint is well founded. BIS interprets no contest as an admission of guilt then "names and shames" the employer. This might cause significant reputational damage and disqualify you from contracts for the provision of public services;
- businesses which contract with public bodies may find themselves forced to pay at or close to the minimum wage because prices have been driven down to unrealistic levels. If you're affected it'd be worth carrying out a compliance check and taking another look at your employment model.
The current minimum wage for adults is £6.50 per hour rising to £6.70 on 1 October. The apprentices' rate is currently £2.73 (yes, really) rising to £3.30 on 1 October.
The Living Wage outside London is £7.85 per hour. The gap between the National Minimum Wage and the Living Wage has widened in each of the last four years.