Most South East bosses unaware of minimum wage fine, survey reveals

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A Government poll has discovered almost half of all businesses did not know it can be a criminal offence to underpay staff as October 1 wage increase kicks-in.

The survey of 1,000 employers across the UK was carried out for the Department of Business Innovation and Skill (BIS), by Censuswide.

A total of 86 per cent of businesses surveyed in the South East are unaware they could be fined £20,000 per worker for underpaying the National Minimum Wage (NMW).

Yesterday (October 1) saw an increase in the NMW rates for almost all employees, including apprentices. However, many bosses are ignorant of the penalties for not paying it, said (BIS).

The nationwide survey of 1,000 businesses by the Department for Business, Innovation and Skills, asked businesses for their understanding and awareness of the NMW rate rise. Among companies in the South East it found:

86 per cent of bosses surveyed did not know they can be fined up to £20,000 per worker for failing to pay the NMW;

47 per cent did not realise it can be a criminal offence;

69 per cent did not know they had to repay workers they had underpaid, and

66 per cent did not realise they could be publicly named and shamed

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. This includes 150,000 people in the South East, which is 4 per cent of the regional workforce and 10 per cent of the national figure.

The three per cent increase in the rate for over 21s is the biggest real increase since 2006. A full time employee working 35 hours will see an additional £364 in their annual pay packets. The new apprentice rate will see apprentices receive £1,037 more in their pay.

Despite lacking knowledge on penalties, 89 per cent of South East bosses surveyed think the NMW is a good idea. Nearly 23 per cent currently employ people on the NMW.

A total of 80 per cent said they were aware of today’s rate increase, however only 27 per cent knew that the new rate for people aged 21 and over is £6.70. This was still higher than the survey national average of 26 per cent.

Bosses in the South East appreciate the positive effect on their business of paying the NMW. Almost 90 per cent of those surveyed said staff were more productive and loyal if paid at least the NMW, while 80 per cent agreed that customers will do business with them again if they know that workers are receiving the right pay.

Almost 60 per cent of South East bosses surveyed said that staff should come and speak directly to them if they had concerns about whether they were being paid the right rate.

The survey found that 58 per cent of South East respondents did not know of resources available to help them pay the right rates.

For further advice and guidance visit https://www.gov.uk/national-minimum-wage.

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