From 1 October 2014, the minimum wage will increase again. The Low Pay Commission recommended an increase of 3 per cent in the adult rate (for 21-year-olds and over) of the national minimum wage from £6.31 to £6.50 per hour and the Government accepted its recommendations.
It is the biggest percentage increase for the adult rate since 2008. Rates will also increase for:
- - 18- to 20-year-olds, by 2 per cent from £5.03 to £5.13 per hour.
- - 16- and 17-year-olds, by 2 per cent from £3.72 to £3.79 per hour.
- - apprentices. The rate will increase by 2 per cent from £2.68 to £2.73 per hour.
The increases are going to be a struggle for some nurseries to cover.
So are you paying your staff the minimum wage? You may think so, but have you included all working time? Some nursery owners are unaware of what is classed as 'working time'.
Here are some of the things that we find happening in nurseries. You may want to think about whether this could be you.
- - are required to work overtime but do not get paid
- - attend training courses outside of work that are relevant to their job but do not get paid
- - have a mandatory requirement to attend training at weekends but do not get paid
- - attend staff meetings or parent evenings but do not get paid.
Under The Working Time Regulations 1998, all these activities would be classed as working time. If these additional hours, worked but unpaid, are added up, and the salary you are paying is then divided by the total hours worked, this often makes the hourly rate under the minimum wage.
HMRC will investigate any wage underpayments and it can publicly name and shame a business and the employer for failing to pay the legally required amount.
Employers can also be fined up to £20,000 for each employee they have underpaid. This is four times the amount of financial penalties previously faced by employers.
There is a confidential helpline for employees to call to make a compliant. HMRC will investigate it and will then look at everything you are doing, not just what you are paying staff.
Jaqui Mann is managing director of HR4 Nurseries, www.hr4nurseries.co.uk.