November 30, 2018

National Minimum Wage: When Business Owners Lose Control…

Picture this. Your business has made the headlines. And so have you. Have you won some kind of SME business of the year award?!

Erm… well, no actually. You’re in the news for breaking the law and exploiting your employees. Because you didn’t know about the changes to national minimum wage…

It’s a PR nightmare.

You can throw money at it, pay the fines, claim ignorance and apologise till the cows come home…

“Sorry Your Honour, but I honestly didn’t know I was underpaying my staff!”

Nice try. But just admit it, you dropped the ball. And now, all your hard work building the reputation of your company, has been undone.

A public naming and shaming

OK, so this – hopefully – hasn’t happened to you. But this nightmare became a reality for more than 200 businesses earlier this year.

The very public naming and shaming of employers who failed to comply with payroll legislation, came ahead of the rise in national minimum wage on April 1 2018.

As well as taking a reputational hit, companies were forced to pay the government some hefty fines. In addition to back pay, they also faced penalties of up to 200% of wages owed.

Collectively, non-compliant employers paid out a whopping £3.4m. Why? Because they made a mistake with their payroll.

So why the crackdown? The government is – understandably – trying to enhance the rights of UK workers and ensure their fair treatment in the workplace. “…It is vital that workers understand their rights, and employers their obligations” said Bryan Sanderson, Chairman of the Low Pay Commission (LPC).

But when employer obligations keep changing, how on earth do you stay in control of it all?

national minimum wage

An easy way to stay in control

Being in control is probably one of the reasons you decided to start your own business. But “with great control comes great responsibility”.

Um, hang on. Maybe the original Uncle-Ben-Spider-Man-quote actually said ‘power’?

Anyway, the point is, you spend every waking minute keeping multiple plates spinning. You probably spin them in your sleep too, which is why you regularly wake up at 3am in a cold sweat, remembering something you forgot to do…

As a business owner, you’re accountable for all the big decisions. And probably a lot of the smaller ones too. You’re busy balancing your work with your life, but the ‘stuff you need to do’ never ends. If it’s not the work to-do list, it’s your kids, your dog, or your mother-in-law.

How far up your list of priorities is ‘keeping up-to-date with changing payroll legislation’? Or ‘keeping an eye on national minimum wage changes’? Really though? You know it’s important, sure! But so are a lot of things you need to do.

For peace of mind and one less thing on your to-do list, have you thought about outsourcing your payroll? It’s an easy way to stay in control of paying your people.

If you’d like a bit more information about what payroll outsourcing looks like, take a look at our brochure – it’s free to download.

And if you haven’t already, maybe just check you’re paying everyone at or above the national minimum wage rate!

 

 

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About the author

Amy Morrison

Digital Marketing Executive