Birmingham employers urged to check National Minimum Wage payments as £775,000 in arrears is paid to workers

Almost 2,800 workers in Birmingham were underpaid by £775,000 last year, HM Revenue and Customs (HMRC) has revealed as it approaches local employers to help prevent errors in salaries.

HMRC is writing to more than 8,000 employers in the Birmingham area to highlight common mistakes around the National Minimum Wage (NMW) and National Living Wage (NLW) - offering practical support to help them get it right and warning of the consequences of breaking the law.

Common mistakes include deductions or payments from items connected to the job, such as uniforms, not paying employees for the full time they have worked and not paying apprentices correctly.

The letters also signposts to further advice and contains a checklist for employers to work through to help identify any mistakes they are making.

Businesses failing to comply with minimum wage rules could face penalties of up to 200% of their arrears – plus having to pay the arrears owed to workers and may also be publicly named.

Marc Gill, Director of Individuals and Small Business Compliance at HMRC, said:

“It is employers’ responsibility to ensure their workers get the pay they are due under minimum wage rules but we are here to support those who need information to get it right.

“Employers must pay the correct wage to their workers. Our information and checklist will help employers get it right first time, assist them in identifying any possible mistakes and make sure their staff are not losing out.”

Compliance work carried out last year found almost 2,800 Birmingham area workers had been underpaid £775,000.

Birmingham employers were handed penalties of more than £900,000 last year because they failed to comply with minimum wage rules.

Employers can access support at any time to ensure they are paying the NMW correctly:

• view the online employers’ guide on calculating the minimum wage
• contact the ACAS helpline on 0300 123 1100 for confidential, free advice (Monday to Friday, 9am to 5pm)
• view our recorded webinars on various minimum wage topics which can be accessed by clicking this link: National Minimum Wage videos and webinars

HMRC is also offering some employers a free support call with one of our National Minimum Wage / National Living Wage experts. The National Living Wage is the minimum wage for those aged 23 and over.

The letters are timely with the recent increase to National Minimum Wage and National Living Wage rates from 1 April 2023.

In the summer, HMRC will be writing to workers in Birmingham asking them to report any concerns they may have about being underpaid the National Minimum Wage.

Background

1. This is part of HMRC’s regular compliance outreach activity, which sees us focus on areas of the UK by offering support and helping businesses identify risks.

2. Further information about the National Minimum Wage, including who is eligible, is available on GOV.UK at:

• https://www.gov.uk/guidance/calculating-the-minimum-wage
• https://www.gov.uk/national-minimum-wage/who-gets-the-minimum-wage
• https://checkyourpay.campaign.gov.uk/

3. HM Revenue and Customs(HMRC) is responsible for the enforcement of National Minimum Wage legislation. The Department for Business and Trade is responsible for National Minimum Wage (NMW) and National Living Wage (NLW) policy.

4. The current National Minimum Wage hourly rates from 1 April 2023 are:

• Age 23 or over (National Living Wage): £10.42
• Age 21 to 22: £10.18
• Age 18 to 20: £7.49
• Age under 18: £5.28
• Apprentice: £5.28

5. The National Minimum Wage rates until 31 March 2023 were:

• Age 23 or over (National Living Wage): £9.50
• Age 21 to 22: £9.18
• Age 18 to 20: £6.83
• Age under 18: £4.81
• Apprentice: £4.81

6. By law workers must be paid at least the minimum wage for their age for all their time spent working. If somebody thinks they may have been underpaid, they can report this online to HMRC at: https://www.gov.uk/minimum-wage-complaint or contact the ACAS Helpline on 0300 123 1100 for confidential, free advice.

7. Employers who do not pay the NMW can be publicly ‘named’. The most recent list was published by BEIS on 8 December 2021. Those who blatantly fail to comply can face criminal prosecution, but most employers pay up when they realise mistakes have been made.

8. Follow HMRC’s Press Office on Twitter @HMRCpressoffice