National Minimum Wage: 10 Ridiculous Excuses For Not Paying It
You don't want a criminal investigation, do you?
HM Revenue & Customs are also the National Minimum Wage police and they have revealed ten of the most ridiculous excuses used by bosses that have failed to pay the right amount ...
If you don't pay your workers the National Minimum Wage, you can be prosecuted by HMRC!
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Some of the excuses for not paying staff the National Minimum Wage (NMW) are pretty silly, but then getting the NMW wrong is pretty silly too! They include only wanting to pay staff when there are customers to serve and believing it was acceptable to underpay workers until they had 'proved' themselves.
"These are all ridiculous excuses!"
The taxman has brought this list of excuses out now as they have a new £1.7 million campaign to encourage employees to check their pay to ensure they are receiving at least the statutory minimum ahead of the National Minimum Wage and National Living Wage rises on 1 April 2017.
The 10 worst excuses given to investigators from the taxman by bosses caught out for underpaying staff include:
The employee wasn't a good worker, so I didn't think they deserved to be paid the National Minimum Wage
It's part of UK culture not to pay young workers for the first three months as they have to prove their worth
I thought it was ok to pay foreign workers below the National Minimum Wage
She doesn't deserve the National Minimum Wage because she only makes the teas and sweeps the floors
I've got an agreement with my workers that I won't pay them the National Minimum Wage; they understand, and they even signed a contract to this effect
My accountant and I speak a different language! He doesn’t understand me and that’s why he doesn’t pay my workers the correct wages.
My workers like to think of themselves as being self-employed, and the National Minimum Wage doesn't apply to people who work for themselves
My workers are often just on standby when there are no customers in the shop; I only pay them for when they're actually serving someone
My employee is still learning, so they aren't entitled to the National Minimum Wage
The National Minimum Wage doesn’t apply to my business.
By law, all workers must be paid at least £7.20 an hour if they are aged 25 years and over, or the National Minimum Wage rate relevant to their age if they are younger.
By law, you need to keep records to prove that you are paying at least the National Minimum Wage. It is a criminal offence not to keep relevant records or fail to produce your records. Get in touch and ask for a copy of our Beginner's Guide to the National Minimum Wage.
And if you get it wrong? It's going to get expensive! There will be costs in working out what you should have paid them. Then you have to pay your staff back pay to compensate them and you will also have to pay a penalty to the taxman.
The penalty can be as much as 200% of the wages not paid up to a maximum of £20,000 per employee! There is also a minimum penalty of £100 per employee. But it can get worse, you need to be aware that as a policy, the taxman will crack down and penalise employers who get it wrong.
"The taxman can prosecute you using criminal law for getting it wrong!"
If you need help understanding the National Minimum Wage, then get in touch on 0333 335 0422 or click here to send us an email enquiry and ask for a copy of our Beginner's Guide.
Until next time ...
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.