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Income Boost for Minimum Wage Workers

Published 16 March 2017

Low paid workers will pocket a wage rise at the start of next month.

Employers are required by law to pay workers at least the national living and minimum wages.

The Government's National Living Wage was introduced at the start of April last year for all working people aged 25 and over (1). It will go up from £7.20 to £7.50 an hour on the 1 April, 2017.

The National Minimum wage will also increase on the same date. For those aged 25 and over the rate will also be £7.50 an hour (2).

Last week employers who were not paying the minimum wage were named and shamed and the list included well known high street names such as Debenhams, Subway and Lloyds Pharmacy (3). In total the 360 businesses that broke the law were fined £800,000.

In the same week it was reported that supermarket giant Tesco will pay back almost £10m to current and former workers after a system error led to them being paid less than the national living wage (4).

And catalogue and online retailer Argos is reportedly being forced to pay £2.4m in wages to more than 37,000 current and former workers, and been fined nearly £1.5m after a HMRC investigation (5).

The HMRC has provided comprehensive guidance for employers in regards to their responsibilities for paying staff the minimum wage (6).

If a worker believes they have been paid less than the minimum wage then they should be allowed to raise and discuss it with their employer. It is important to consider any such case in a fair and reasonable manner as workers can complain to HMRC if they believe they are being underpaid.

Employers who discover they have paid a worker below the correct minimum wage should pay any arrears immediately. A failure to do so could see them landed with a notice for the arrears plus a fine for not paying the minimum wage. HMRC can also take them to court on behalf of the worker if the employer still refuses to pay.

References:

1. Allen K. The national living wage and what it means. The Guardian [Internet]. 2016 Apr 1 [cited 2017 Mar 16]; Available from: https://www.theguardian.com/uk-news/2016/apr/01/the-national-living-wage-and-what-it-means

2. National Minimum Wage and National Living Wage rates - GOV.UK [Internet]. [cited 2017 Jan 26]. Available from: https://www.gov.uk/national-minimum-wage-rates

3. Record number of employers named and shamed for underpaying - GOV.UK [Internet]. [cited 2017 Mar 16]. Available from: https://www.gov.uk/government/news/record-number-of-employers-named-and-shamed-for-underpaying

4. National Living Wage rises as part of Philip Hammond’s Autumn Statement | The Independent [Internet]. [cited 2017 Mar 16]. Available from: http://www.independent.co.uk/news/business/news/national-living-wage-rise-increase-autumn-statement-2016-philip-hammond-a7434041.html

5. Butler S. Argos to pay £2.4m to 37,000 workers paid less than minimum wage. The Guardian [Internet]. 2017 Feb 16 [cited 2017 Mar 16]; Available from: https://www.theguardian.com/business/2017/feb/16/argos-fined-paying-below-minimum-wage

6. The National Minimum Wage and Living Wage - GOV.UK [Internet]. [cited 2017 Mar 16]. Available from: https://www.gov.uk/national-minimum-wage/employers-and-the-minimum-wage

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