The risk that employers will fail to comply with regulations will increase when the national minimum wage (NMW) rates rise in April, experts have warned.
A survey from accountancy and business advisory firm BDO found that 98 percent of mid-market businesses said that the proportion of their staff earning within £2 per hour of the NMW would increase when the new rates come into force on 1 April, 2025.
The national living wage (NLW), for workers aged 21 and over, rises by 6.7 percent to £12.21 per hour. The NMW, for people aged 18-20 rises 16.3 percent to £10 per hour, while under 18s are entitled to £7.55, an increase of 18 percent.
Employers could fall foul of legal requirements if incentives such as pensions or other salary sacrifice schemes push employees below the minimum wage. If this happens, businesses risk HMRC fines as well as being named and shamed.
Caroline Harwood, head of employment tax at BDO, said: “Those employers who have historically paid wages above the minimum levels may now find themselves in a position where they have to pay close attention to the rules to ensure they are NMW compliant.
“There are a number of risk areas for employers to consider – notably around salary sacrifice, deductions for uniforms or accommodation, or memberships of savings clubs that could in certain circumstances tip them over the threshold into non-compliance.
“All too often, we see household names appearing on the list of companies judged to have breached the NMW rules, many of whom are likely to have been tripped up on technicalities.”
