The National Minimum Wage: How to adhere to the requirements
In recent months, there has been no shortage of press coverage relating to the payment of national minimum wage and the alleged failure of many businesses to adhere to the requirements of the legislation in this regard. Whether this is because what is counted towards working time is not understood or because the introduction of the national living wage has resulted in some creative budgeting techniques, there are many articles aimed at shaming businesses who are thought to be getting it wrong.
The national living wage was introduced on 1st April 2016 in an attempt to ensure that workers aged 25 and over receive (for the time being) at least £7.20 per hour worked (a 50p increase on the previous regime). Whilst in isolation this does not seem like a significant increase, the Regulatory Policy Committee anticipated that the direct cost of the introduction of the national living wage would exceed £804 million. In order to avoid or at least temper the impact of this additional cost, some businesses have sought to limit or indeed remove other employee benefits, whereas other businesses simply appear to be calculating the payment of national minimum wage incorrectly.