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Companies in cleaning sector unaware of £20k fine for not paying National Minimum Wage

The Department for Business, Innovation and Skills (BIS) has warned that many employers in the cleaning industry remain ignorant of the rise in the national minimum wage (NMW) and that they risk a hefty fine as a result.

As of today, NMW rates increase for almost all employees, including 230,000 workers in the cleaning sector. However, 80% of businesses surveyed across all sectors in the UK are unaware they could be fined £20,000 per worker for underpaying the national minimum wage (NMW), according to the government.

The nationwide survey of 1,000 businesses by the department also found that 53% of bosses did not realise it can be a criminal offence; 64% did not know they had to repay workers they had underpaid; and 65% did not realise they could be publicly named and shamed.

However, BIS said that despite lacking knowledge on penalties, an overwhelming 88% of UK bosses surveyed think the NMW is a good idea. Although it did show some discrepancies about who people thought were eligible: 22% didn’t think full time employees were eligible and 23% didn’t think part time employees were eligible. 

30% of the businesses surveyed currently employ staff on the NMW, but 74% didn't know didn’t know what the new hourly NMW rate would be.

From 1st October 2015, the hourly UK NMW rises from £6.50 to £6.70 for 21-year-olds and over. For workers between the ages of 18 to 20 the NMW rises from £5.13 to £5.30, while those under 18 will see their pay increase from £3.79 to £3.87. Apprentices will see the largest rise in percentage terms (21%): from £2.79 to £3.30 per hour.

The Government says that the 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 will see apprentices receive £1,037 more pay.

The new rate comes into force ahead of the planned national living wage of £7.20 an hour for over-25s from next April.

It is estimated there were nearly 1.5 million 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. 

For further information visit https://www.gov.uk/national-minimum-wage.

Published on: 07/06/2017



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