Minimum wage mistakes employers make without meaning to

Why it matters

HMRC can recover arrears going back up to 6 years, at today's rate, add a penalty of up to 200% of the arrears (up to £20,000 a worker) and publish the employer's name. Most of the employers named didn't set out to underpay.

The common mistakes

• Salaried staff paid just above the minimum who work extra hours in a busy month, or whose pay is spread evenly but whose hours aren't.
• Salary sacrifice for a pension, cycle to work or a car, which reduces pay for minimum wage purposes.
• Uniform, tools, training or checks the worker pays for or has deducted, even if the deduction is small.
• Unpaid time: opening up, cashing up, security checks, handovers, required training and trial shifts.
• Travel time between clients or sites for care, cleaning and maintenance workers.
• Accommodation charges above the daily offset.
• Birthdays: someone turning 21 moves to the National Living Wage from their next pay period.
• The April rise: new rates apply from the first pay period starting on or after 1 April, which can be in March for some pay cycles.

Sleep-in shifts

Since the Supreme Court decision in Mencap v Tomlinson-Blake (2021), time when a worker is on call but permitted to sleep usually doesn't count as working time. Time spent awake and working does. Keep a record of the hours worked during the night.

How to stay safe

1. Check every pay period, not the annual salary, against all the hours worked.
2. Build in a margin for anyone within about 50p an hour of the minimum.
3. Check the effect of salary sacrifice before anyone joins a scheme.
4. Keep pay and hours records for at least 6 years.
5. Plan the April rise in January, and write to everyone affected before it applies.