Businesses have been warned they face financial penalties and potential director’s disqualification if they aren’t prepared ahead of statutory wage payments increasing on 1 April.
The alert has been issued by Midlands employment lawyer Sally Morris who says that all companies must ensure their rates of pay are compliant with the looming changes if they are to avoid enforcement action from HMRC.
Statutory payment rates are reviewed by the Government every year. From 1 April the National Living Wage hourly rate will increase from £7.83 to £8.21. In turn, the National Minimum Wage will rise to £7.70 for workers aged 21 to 24, to £6.15 for those between 18 and 20, and under 18s will see the hourly rate increasing to £4.35.
The hourly pay rate for the country’s thousands of apprentices will also increase – rising to £3.90 from £3.70.
Ms Morris, partner and head of the Employment team at mfg Solicitors, said: “The changes to statutory pay are only a matter of months away and they represent some of the highest increases on record with over 2.4 million workers set to benefit.
“What is concerning is that many businesses across the country have still to get all of their payroll systems, pay structures and processes into place to ensure their relevant employees, including apprentices, are paid the correct rate from 1 April.
“I’m out speaking to many businesses at the moment to ensure they cover all bases as non-compliance can result in hefty fines of up to £20,000 per underpaid worker, together with the underpayment, while directors of companies risk being named and shamed by HMRC if they are considered to be serious offenders.
“The rule of thumb is prepare now to avoid huge financial and personnel issues later.”
Ms Morris and her team are offering a free 15-minute telephone consultation to businesses who need further advice on the rise in statutory payments. Readers can email email@example.com for to arrange a call.
mfg’s employment department advises both businesses and individuals on all areas of employment and HR law.
The team is also highly rated in the most recent edition of the Legal 500 and described as one of the leading employment law specialists in Worcestershire.