16 January 2014
The announcement by the government of penalties from next month of up to £20,0001 for employers who break the law and flout the national minimum wage, with possibly even tougher sanctions to come, is a clear warning shot across the bows of the hairdressing industry, the National Hairdressers’ Federation has said.
Hairdressing was last autumn highlighted by the government as one of the worst offenders when it came to industries that fail to pay apprentices their correct NMW rate.
Salons therefore need to recognise the government is deadly serious about enforcement and should be checking their systems, procedures and payroll as a matter of priority to ensure they are completely compliant with NMW regulations, chief executive Hilary Hall has advised.
The government is making it very clear it will not tolerate employers flouting the law and failing to pay staff their proper national minimum wage.
“Rightly or wrongly, hairdressing already has a bad name for paying below the minimum wage. Failing to pay the wage not only harms the reputation of an individual salon and – now – could cost them dear, it is also deeply damaging to our whole industry.
“Hairdressers must ensure they are sticking absolutely to the letter of paying the wage. NHBF standard employee contracts include an obligation that a salon pays the national minimum wage. Membership of the Federation can therefore send out a powerful message to the public and politicians that a salon is reputable, legal and setting the standard for the rest of the industry.
“Finally, as well as enforcement, we’d like to see the government doing more around education and advice. We know from members they often find administering the different minimum wage rates2 to be complex, therefore more support to help small businesses meet their obligations would be welcome.”
- Currently employers that break NMW law must pay the unpaid wages plus a financial penalty, calculated as 50% of the total underpayment for all workers found to be underpaid. The maximum penalty an employer can face is £5,000. Under the new plans, thefinancial penalty percentage will rise from 50% to 100% of the unpaid wages owed and the maximum penalty will increase from £5,000 to £20,000. The regulations are expected to come into force from February.The government has also said it will bring in legislation to allow the maximum £20,000 penalty to be applied to each underpaid worker.
- The national minimum wage is set at varying hourly rates based on age or whether an employee is an apprentice. Currently these are:
- 21 and over: £6.31
- 18 to 20: £5.03
- Under 18: £3.72
- Apprentice*: £2.68
*This rate is for apprentices under 19 or those in the first year of their apprenticeship.