HM Revenue and Customs (HMRC) has issued a statement urging students and other summer workers to check that they are being paid the correct National Minimum Wage (NMW) rates.
In the 2020/21 tax year, HMRC helped over 150,000 workers across the UK to recover over £16 million remuneration that was due to them because incorrect NMW rates had been used.
Most workers should be paid the correct NMW and National Living Wage rates. This includes temporary seasonal staff on zero-hour and short-term contracts working in bars, hotels, shops and warehouses.
These workers have been reminded by HMRC that minimum wage rates are reviewed and updated at the end of every tax year. This could mean that many people could be underpaid by their employers who have not updated payroll systems with the current NMW rates.
Steve Timwell, Director of Individuals and Small Business Compliance at HMRC, said: “We want to ensure that seasonal workers and students are being paid what they are entitled to and, as the economy reopens, help employers if they are unsure of the rules.”
National Minimum Wage hourly rates from 1 April 2021:
- £8.91 – age 23 or over (National Living Wage)
- £8.36 – age 21 to 22
- £6.56 – age 18 to 20
- £4.62 – age under 18
- £4.30 – apprentice
HMRC explains: The two most common causes of minimum wage underpayment are deductions and unpaid working time. For example:
- Expenses for tools or equipment needed for the job.
- Cost of uniform or clothing connected with the job.
- Travelling time between work locations.
- Training time.
Other reasons for underpayment can include employee tips not being included in their wages, and an employee moving to a higher rate per hour after a birthday.
Employers who pay workers less than their entitled amount must pay arrears of wages to the employee.
If your business needs help or advice, contact us today.