Are You Falling Foul of National Living Wage Rules?

April 16, 2024

By Fiona Sinclair

Employers can often fall foul of minimum wage rules by accident. Following an increase to the National Living Wage by nearly 10% and the broadening of its scope to cover hundreds of thousands more workers, our employment team share their top tips for avoiding a minimum wage breach.

What changed on 1 April 2024?

As we’ve covered recently in our April 2024 employment law changes article here, there was an increase in the National Living Wage on 1 April 2024 (from £10.42 to £11.44 per hour). This change will also mean that thousands of additional workers will be entitled to the National Living Wage, with the threshold for entitlement being lowered from 23 to 21 years of age.

Are you compliant with National Living Wage rules?

Complying with National Living Wage rules is not quite as straightforward as ensuring that your eligible workers get paid at least £11.44 per hour. There are several ways in which employers can inadvertently breach the rules.

Common mistakes by employers

• With salaried hours workers (i.e. those who are paid by the hour), employers can often overlook the need to pay those workers for the hours worked over and above their usual basic hours;
•  Where workers are required to work whilst ‘on call’ (e.g. where they sleep in at a work location and are required to work when they’re called upon during the night), it can be really tricky for employers to get their minimum wage payments right;
• If employers make deductions from workers’ pay (e.g. for uniform or other costs) this can sometimes bring a workers’ average salary beneath the National Living Wage rate;
• Employers can sometimes place workers in the wrong wage category (e.g. placing younger workers in the apprentice wage category);
• Employers sometimes overlook the annual increase in the National Living Wage rate;
• For younger workers, it’s important for employers to understand how their birthdays can trigger them moving up a minimum wage band;
• Where workers travel as part of their work, employers should ensure that they distinguish between a worker’s travel to work (unpaid) and a worker’s travel as part of their work (paid);
• An employer’s failure to cover expenses incurred by a worker can sometimes push the worker’s average salary beneath the National Living Wage rate;
• Employers should make sure that they pay workers right from the start of their shifts. For example, if workers are required to arrive early for work to change into certain clothing, that time will amount to working time for the purposes of calculating the National Living Wage.

What should you do now?

A minimum wage audit in your organisation every 2 years would be sensible. At Darwin Gray, our HR experts regularly undertake these independently for clients. Such an audit can give your business peace of mind and can also identify any areas to tighten up on. Get in touch if you’d like to discuss minimum wage audits.

If you require advice or assistance on national minimum wage compliance, contact Fiona Sinclair on fsinclair@darwingray.com or 029 2082 9132 for a free initial chat to see how we can help you and your business.