2015 will see bigger fines for minimum wage cheats

Employers failing to recognise the national minimum wage will find 2015 a tough year to escape without serious fines, according to a payroll expert for one of the North West region’s leading accountancy companies.

Lisa Kennery, payroll manager of Blackburn-based business advisory and accountancy group Pierce, is urging the region’s employers to pay more than lip service to the government’s National Minimum Wage rates and suggests that the naming and shaming of employers in 2014 is just the tip of the iceberg as the Department for Business, Innovation and Skills ramps up its efforts to punish offenders; a process that has already seen dozens of companies named and fined heavily for breaching employment law by paying workers less than the minimum wage.

Kennery, a regular blogger on payroll and pensions matters, claims that unscrupulous employers will have nowhere to hide in 2015. She commented: “The government has already made an example of over 50 employers, who have been made to pay arrears to their employees and been on the receiving end of fines. These penalties can total up to £20,000 and in extreme cases, prosecution could follow, so it simply doesn’t make sense for any business to try to avoid paying employees the National Minimum Wage.

“The Department for Business Innovation and Skills has shown its intent and 2015 promises an even greater purge as more disadvantaged employees become aware of the Pay and Work Rights Helpline, which, in effect, is a telephone hotline for whistleblowers, allowing employees to report Minimum Wage abuses in strict confidence.”

The government’s Small Business, Enterprise and Employment Bill will ensure that the strict penalties in force will be applied for each case of an underpaid worker and not per employer. Business Minister, Jo Swinson, speaking last month, urged employees to report abuses of the National Minimum wage but also encouraged employers to seek advice to ensure they are aware of their obligations. She said: “All workers are entitled to the minimum wage. This isn’t a generous gesture by employers, this is the law.”

Lisa Kennery has advised businesses to seek advice, either from payroll specialists or via the Government’s helpline, if they are unsure about their obligations. She added: “Of course, unscrupulous employers looking to flout the law are unlikely to seek advice but the vast majority of businesses will and those who have professional advisers will be fully aware of their responsibilities and minimum wage rates, which will increase annually in October of each year. The minority of businesses attempting to circumvent the law will find 2015 a very unforgiving year and a potentially expensive one!” From October 2014 the National Minimum Wage rates are: age 16-17, £3.79; 18-20, £5.13 and 21 and over £6.50. For apprentices under the age of 19, or in the first year of an apprenticeship, the rate is £2.73 per hour.