Low Pay Commission reviews annual National Minimum Wage compliance and names hospitality employees as most likely to be underpaid

By Alison Dixon


The Low Pay Commission has recently published its independent report on underpayment of the National Minimum Wage (NMW) during 2017/18. The Commission found that over 200,000 workers were underpaid by a cumulative total of £15.6m this year. It attributes this, in part, to unintentional underpayments, where many employers suffer from a lack of information about their responsibilities or a lack of ability to accurately calculate hourly rates.  The report states that it is estimated that the hospitality sector continues to have the highest number of jobs paid below the minimum wage, at around 54,000.

The report confirmed that HMRC funding for enforcement of the NMW has been bolstered, facilitating their investigation and intervention powers. This is reflected in the value of penalties issued, which has increased from just under £4m in 2016/17 to over £14m in 2017/18.

As HMRC strengthens its enforcement efforts, employers in the hotel sector should review and audit their minimum wage compliance on a regular basis, to avoid miscalculations or investigatory activity and to ensure that they are in a strong position to demonstrate compliance in the event of an investigation.

The report can be accessed here