All employers are required to pay the National living wage (NLW) of £7.20 to anyone over the age of 25, unless they are in the first year of their apprenticeship.
This week, it has been revealed that just three employers have been prosecuted for paying workers below the minimum wage, despite HMRC naming and shaming 700 since February 2014, with more 13,000 employees being underpaid.
Recently, delivery courier Hermes has faced controversy for paying below the NLW. However, because Hermes workers are classified as self-employed, they are not obliged to pay the NLW. Questions have since arisen whether these couriers are correctly classified as self-employed.
Some couriers have claimed they are not self-employed due to the nature of their work; having to arrive at the depot at certain times, delivering parcels within time slots, and being told they may lose their round if they cannot work the days required. As the investigation continues, a word to employers should be to establish the correct employment status of workers in order to avoid any investigation and penalties.
If you do not pay up, employees can report you to HMRC, which has the power to issue you with notice of arrears and a penalty fine. As an employer, you could also be named and shamed.
If you haven’t already, you need to take these 4 steps:

1. Check you know who is eligible in your organisation by looking on GOV.UK’s employment status
2. Take the appropriate payroll action by checking HMRC.
3. Let your staff know about their pay rate.
4. Check your staff under 25 are earning the right rate of minimum wage.