HMRC crackdown on minimum wage breaches
Businesses are warned that HMRC is clamping down on breaches of the minimum wage.
The warning comes after it was revealed from investigations by the tax authority that 26,000 workers were paid less than the minimum wage. HMRC said 708 employers had been fined with charges of up to £5,000, after it reviewed 1,693 complaints in 2012-13.
Following the investigation, affected workers were given an average of £300 each in back-pay.
Investigated cases included the illegal use of interns, unpaid extra hours and workers being forced to buy company clothes as uniform.
The national minimum wage is currently £6.19 an hour for workers aged 21. (www.gov.uk/national-minimum-wage-rates)
Businesses need to be aware that HMRC is clamping down on breaches of minimum wage legislation and has the power to fine employers who fail to adhere to the rules.
Businesses who take on interns need to be wary how their arrangements may be viewed in this context.
While there is no definition of an internship/work experience in minimum wage legislation, the arrangement a person has with an employer might mean that person is classed as a “worker”, therefore entitling him or her to the minimum wage even if described as an “intern”.
The government’s checklist of what “generally” describes a worker includes the promise of future work, and having to turn up for work even if the individual doesn’t want to.
Employers who are unsure about what constitutes a “worker” and whether the minimum wage legislation may affect them, should contact a professional for advice.
For more information, please contact Tim Preece at the office.
Author: Tim Preece FCCA
A former pupil at Lancaster Royal Grammar School, Tim joined Scott & Wilkinson in 1992 as a trainee after completing a degree in Maths and Economics at Leeds University and qualified as an Accountant in 1996. Tim was...
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