NATIONAL MINIMUM WAGE – ARE YOU WITHIN THE LAW?
The government is getting even tougher on NMW enforcement. Make sure you understand the rules, says Salon Smart 2017
The recent appointment of Sir David Metcalf as the first Director of Labour Market Enforcement is a clear signal of the government’s intention for tough enforcement of the National Minimum Wage, the National Hairdressers Federation has warned.
Three government agencies will now centralise their intelligence to target sectors and regions to identify rogue employers ‘who exploit their workers and undercut honest business’.
The agencies will also work closely with the Anti-Slavery Commissioner to identify victims of ‘modern slavery’ and those who are working in the UK illegally. A recent raid on nail bars employing illegal foreign workers resulted in 100 arrests, and 68 businesses were warned that they face fines of up to £20,000 for every illegal worker.
The news on David Metcalf’s appointment comes ahead of the launch of a £1.7 million National Minimum and Living Wage awareness-raising campaign later this month. It is designed to help ensure the UK’s lowest paid workers receive the correct rates of pay when they increase on 1st April 2017 – and know what steps to take if they do not. Specific industries will be targeted, including hair salons, beauty salons and barbershops.
NATIONAL MINIMUM WAGE
The current (since October 2016) hourly rates are:
£6.95 for ages 21 to 24
£5.55 for ages 18 to 20
£4 for ages 16 to 17
£3.40 for apprentices aged 16 to 19 (or over if in first year of apprenticeship)The current hourly Living Wage rate is:
£7.20 for ages 25 and above (including apprentices who have completed their first year of training). From 1st April 2017 it rises to £7.50
Says NHF CEO Hilary Hall: “We are pleased to hear of this new appointment and greater co-operation between different agencies… However, it will be even more important for employers in our sector to pay the right rates, which will be increasing from April 2017, or risk the consequences of increasingly tough enforcement action.”
At Salon Smart 2017 we’ll be discussing the impact of the National Minimum and Living Wages on hairdressing, and the difficulties salon owners are facing in terms of keeping up with the ever-changing pay landscape. With different rates to be paid for apprentices aged under 18, 18 to 20, 21 to 24 and now 25 and above, there’s no doubt it’s confusing. “It’s a perfect storm for salon owners because they typically take on people aged 16 or 17 and often as an apprentice.,” continues Hilary. “It means salon owners have to know when their workers have birthdays, especially the birthdays that trigger a change in payment rates, including apprentices aged 19 or over who have completed the first year of their apprenticeship.”
We’ll also be hearing from a salon owner who was subject to a National Minimum Wage inspection, carried out by HMRC, and subsequently “named and shamed” in their local paper. According to the Department for Business, Energy and Industrial Strategy (formerly BIS), which is responsible for implementing NMW and NLW policy, the objective of the scheme is to raise awareness and deter employers who would otherwise be tempted to break the law.
But as we’ll hear at Salon Smart, for our salon owner it was a tiny error in an otherwise immaculately run business that formed the basis for the “naming and shaming”. And often there is no chance of a rebuttal, as the right to appeal is only offered in exceptional circumstances, such as a risk of personal harm.
If you want to make sure you’re up to date with paying your staff correctly, make sure you attend our session “What the National Minimum Wage means to you” on Monday 20 March at Salon Smart. Hear from a salon owner, a legal expert and a tax specialist on the reality of HMRC’s crackdown on payment protocol.