Following a review of the scheme, it’s been announced that employers that fail to pay their employees the National Minimum Wage or National Living Wage will continue to be publicly named by the government.

Are companies named if they do not pay employees National Minimum Wage?

The naming scheme for companies that fail to pay their workers the National Minimum Wage is set to return following a review.

The naming scheme was suspended in June 2019 pending a review, however it’s set to return with the government calling out cases of abuse. The National Minimum Wage compliance scheme will also see changes, including:

• Naming rounds will occur more often to enhance the effectiveness of the measure as a deterrent.
• The threshold for naming employers will also increase, meaning that companies that owe arrears of more than £500 in National Minimum Wage payments to their workforces will now be named. The threshold was previously £100.
• Businesses that underpay by less than £100 will have the chance to correct their mistakes by paying back workers, otherwise they can face fines of up to 200% of the arrears.

This new proportionate approach to the scheme will mean that some businesses falling foul of the rules by minimal sums will not be named, provided they correct any errors.

What are the National Minimum Wage and National Living Wage rates in the UK?

Both the National Living Wage and the National Minimum Wage rates are due to change on 1 April 2020. For those ages 25 and over the current rate is £8.21, but this will rise to £8.72 in April.

The National Minimum Wage and National Living Wage rates in the UK are:

Year	25 and over	21 to 24	18 to 20	Under 18	Apprentice
April 2019 (current rate)	£8.21	£7.70	£6.15	£4.35	£3.90
April 2020	£8.72	£8.20	£6.45	£4.55	£4.15

Who is entitled to the National Minimum Wage and National Living Wage?

It doesn’t matter how small an employer is, they still have to pay the correct minimum wage. Contracts for payments below the minimum wage are not legally binding.

The difference between the National Minimum Wage and National Living Wage is:

• The National Minimum Wage is the minimum pay per hour almost all workers are entitled to if they are of at least school-leaving age.
• The National Living Wage is higher than the National Minimum Wage and workers get it if they’re over the age of 25.

Apprentices are also entitled to an apprentice rate if they’re either:

• aged under 19
• aged 19 or over and in the first year of their apprenticeship

Who isn’t entitled to the National Minimum Wage and National Living Wage?

There are types of workers who aren't entitled to the National Minimum Wage or National Living Wage. They include:

• self-employed people running their own business
• company directors
• volunteers or voluntary workers
• workers on a government employment programme, such as the Work Programme
• members of the armed forces
• family members of the employer living in the employer’s home
• non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and are not charged for meals or accommodation, for example au pairs
• workers younger than school leaving age (usually 16)
• higher and further education students on work experience or a work placement up to one year
• people shadowing others at work
• workers on government pre-apprenticeships schemes
• people on the following European Union (EU) programmes: Leonardo da Vinci, Erasmus+, Comenius
• people working on a Jobcentre Plus Work trial for up to 6 weeks
• share fishermen
• prisoners
• people living and working in a religious community

See also

Five upcoming employment law changes your company needs to be aware of in 2020

Executive pay ratio reporting: what do you need to know?

Report shows only a third of staff think pay in their organisation is fair

Find out more

National Minimum Wage and National Living Wage rates (Gov.uk)

Who gets the minimum wage (Gov.uk)

Image: Getty Images

Publication date: 14 February 2020