The 10 most absurd ways companies avoid paying minimum wage
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Many people across the country are used to having to negotiate their pay and salary with their employer. However, there is one wage which is never up for debate or “absurd excuses”.
In the UK, the National Minimum Wage is the lowest wage that an employer is allowed to pay an employee, in accordance with law.
The country’s National Living Wage is the highest band of the National Minimum Wage which people should get when they reach the age of 23.
However, this is not always the case and HMRC is calling out the top ten “absurd excuses” employers have used in the past for not paying the legal minimum.
From lying about their workers being self-employed to blaming British culture, some employers have taken advantage of often vulnerable employees for their own ends.
Yet, HMRC is always there to catch bosses out when they behave badly. Here is the list of top ten excuses employers have given the Government when explaining why they have not paid the Minimum Wage.
“She does not deserve the National Minimum Wage because she only makes the tea and sweeps the floors.”
Everyone who works a paid job is entitled to the National Minimum Wage. This also includes those casual workers, people on zero hours contracts and agency workers.
“The employee was not a good worker, so I did not think they deserved to be paid the National Minimum Wage.”
Contracts between employers and employees prevent bosses from changing their mind about paying for someone’s work, even if they do not believe the job was done to a good standard.
Minimum Wage: HMRC lists top ten ‘absurd excuses’ to not pay (Image: GETTY)
“My accountant and I speak a different language – he does not understand me, and that is why he does not pay my workers the correct wages.”
Professional accountants are very unlikely to be the reason a worker has not been paid the correct wage. Whether by mistake or not, accountants will be aware of the consequences for business owners if this were to happen.
“My employee is still learning so they are not entitled to the National Minimum Wage.”
Trainees are entitled to be paid the minimum wage. Employers are not allowed to make pay dependent on how far someone is in the early stages of their job or careers.
“It is part of UK culture not to pay young workers for the first three months as they have to prove their ‘worth’ first.”
It has never been “part of UK culture” in modern times to not pay workers at any period of their employment or at any age.
“The National Minimum Wage does not apply to my business.”
All employers are entitled by law to pay their workers no less than the National Minimum Wage, including small businesses.
“I have got an agreement with my workers that I will not pay them the National Minimum Wage; they understand, and they even signed a contract to this effect.”
The National Minimum Wage is a legal requirement from the Government to businesses. Workers can not waive their right to it and get paid less.
“I thought it was okay to pay young workers below the National Minimum Wage as they are not British and therefore do not have the right to be paid it.”
Foreign workers are entitled to the wage if they are working in the country. Failure to pay the National Minimum Wage would not only be a breach of HMRC legislation, but may also warrant a claim under the Equality Act 2010 for discrimination.
Minimum Wage: Workers should report any concerns regard their employer to HMRC (Image: GETTY)
“My workers like to think of themselves as being self-employed and the National Minimum Wage does not apply to people who work for themselves.”
While self-employed people are not entitled to the wage, they need to be running their own business to be classified as self-employed. If they are working for someone else, they are not self-employed.
“My workers are often just on standby when there are no customers in the shop; I only pay them for when they are actually serving someone.”
Workers must be paid for any allocated hours they are working, not for when they are completing specific tasks during those hours.
Steve Timewell, Director of Individuals and Small Business Compliance at HMRC, warns that those entering employment after the pandemic need to be aware of their rights as workers.
He said: “The majority of UK employers pay their workers at least the National Minimum Wage, but this list shows some of the excuses provided to our enforcement officers by less scrupulous businesses.
“Being underpaid is no joke for workers, so we always apply the law and take action. Workers cannot be asked or told to sign-away their rights.
“We are making sure that workers are being paid what they are entitled to and, as the economy reopens, reminding employers of the rules and the help that is available to them.”
Mr Timewell also reminded the public to get in contact with HMRC if they have any concerns about their wages or employer.
“HMRC reviews every complaint made about the minimum wage, so if you think you are being short-changed, or are a business that is unsure of the rules or needs help to get things right, get in touch and we will help you,” he added.
“But any employer deliberately or unapologetically underpaying their staff will face hefty fines and other enforcement action.”
What is the National Minimum Wage
As of April 2021, the National Minimum Wage rate per hour is £8.91 for workers aged 23 and over.
For workers aged either 21 or 22, the wage is £8.36, while the minimum wage for people aged 18 and 20 is £6.56.
If you are under 18, the National Minimum Wage is £4.62 when working. For apprentices aged under 19 and those aged 19 or over who are in their first year, the minimum wage is £4.30.
Any worker can report an employer to HMRC for not paying the minimum wage and the initial report can be anonymous.
Businesses found not to have paid the wage could be taken to Civil Court by HMRC, with the maximum fine for non-payment being £20,000 per worker.
Employers who fail to pay at all could be named publicly and banned from serving as a company director for 15 years.