Are you one of the 233 companies? National Minimum Wage compliance continues to dominate headlines

Compliance with National Minimum Wage (NMW) legislation continues to be a hot topic given the recent media interest in the latest list of some 233 employers who have been named this week.  

The technical nature of the Regulations mean that many employers have technical breaches, e.g. understanding what constitutes working hours, aligning the dates of payments with time worked, the operation of salary sacrifice, the provisions around deductions etc. These breaches incur penalties of up to 200% of the underpayment as well as naming by BEIS. 

There has been a significant increase in NMW audit activity by HMRC over the past few months and many employers are again receiving letters from HMRC advising them they will be subject to a NMW audit. It is important that anyone who receives such a letter takes advice immediately

The good news is that HMRC has recently launched a new initiative, called "Assisted Self Correction". It provides an opportunity for employers to deal with historical risk with reduced costs and minimal reputational impact. This initiative has only just been announced, it is not being advertised by HMRC and is likely to run for a short while, possibly only a few months.   

While it will not be suitable for all employers, and is not available to those who currently have an open enquiry or have previously had a Notice of Underpayment, taking advantage of this Assisted Self Correction in respect of NMW underpayments should mean that employers will avoid;

  • penalties of up to 200% of the underpayments; and
  • being publicly named by BEIS for breaching NMW

While on the face of it this might appear to be good news, this will not be appropriate for all employers and the interactions with HMRC will need to be managed carefully. 

We have a specialist team who have a great deal of experience in assisting clients to identify and manage potential compliance risks around NMW.  

If you have any questions please contact John Harding or your usual PwC contact.