80% of employers across all sectors did not know the fines they faced for not paying eligible employees at least the National Minimum Wage (NMW), a new poll has found.
It is estimated there were nearly 1.5m workers in the UK aged over 21 being paid on or below the NMW in 2014, according to a separate ONS Annual Survey of Hours and Earnings. This includes 10,000 workers in the textile sector, which is 13% of the workforce and 1% of jobs in all sectors.
The Department for Business, Innovation and Skills carried out the nationwide survey of 1000 employers which also found:
- 30% employ people on the NMW
- 74% didn’t know what the hourly NMW rate would be from 1st October
- 53% didn’t know it was an offence not to pay NMW or falsify pay records
- 64% didn’t know they must repay workers they have underpaid
- 65% didn’t know companies could be named and shamed for not paying
The penalty for not paying employees at least the NMW that they are entitled to includes a fine of up to £20,000 per worker, and the business could be publically named.
The revelation provides the sector with a timely reminder to ensure it is paying its employees at least the NMW, which, as of 1st October, is £6.70 for 21-year-olds and over. This 3% increase in the adult rate represents the biggest real increase in the NMW since 2006 and moves the wage closer to the average living wage than ever before.
The new rate will mean that a full time employee, working 35 hours, will see an additional £364 in their annual pay packets, the largest cash increase since 2008. The new apprenticeship rate, the largest increase at 21%, will see apprentices receive £1,037 more pay.
Employers have said they are overwhelmingly in favour of the NMW, with 88%, across all sectors, thinking it was a good idea. Although the survey showed some discrepancies about who people thought were eligible:
- 22% didn’t think full time employees were eligible
- 23% didn’t think part time employees were eligible
- 32% didn’t think agency employees were eligible
- 47% didn’t think trainees or those on probation were eligible
Employers have also seen other benefits from paying their employees the NMW, with 85% reporting an increase in production, loyalty and morale and frequent returning customers (80%).
The new rates are:
- 21 and over: £6.70
- 18 to 20: £5.30
- Under 18: £3.87
- Apprentice: £3.30
