[UK] Rural businesses a target of minimum wage checks

Farm employers who do not pay workers the national minimum wage are the target of a crackdown by government officials, Farmers Weekly reports.

The accounting firm Saffery Champness issued the warning, saying that HMRC was an active part of the government action and relaying reports from a number of farmers who had undergone wage checks.

Martyn Dobinson - a partner at Saffery Champness - said, “We are aware that HMRC is carrying out compliance checks across the rural sector.” He explained that officials scrutinise records to confirm minimum wage levels are being met and that the correct allowances and deductions are being made. 

Mr Dobinson continued, “We are urging all employers to be aware of the correct minimum wage levels and to be sure that their records are correct and up to date,” and he warned that non-compliance penalties were severe.

Severe Penalties

As well as repaying arrears, employers can face a 200 per cent non-negotiable underpayments penalty dating back up to 6 years for current and former employees. In addition to public naming and shaming when arrears total more than £100.

Saffery Champness identified the main areas of legislation breaches:

  • Provision of benefits like accommodation: where rent-free accommodation is provided, the accommodation offset is seen as income and added to pay for NMW calculations. However, any rent paid by the employee should be deducted from the wage.

  • Incorrect deductions from pay, for own goods, products and food or salary sacrifice.

  • Deducting the cost of a uniform or equipment required to carry out a role, where these are not provided by the employer.

  • Volunteers: HMRC challenges whether individuals are truly volunteers or actually workers for NMW purposes. Any such arrangement needs to be very carefully worded. For example, there can be additional complications with casual workers and temporary staff – beaters employed on shoots, or seasonal agricultural workers.

Minimum wage

The UK national minimum wage (NMW) dictates the lowest hourly rate a worker can be paid by law. The rates are determined by the government annually.

Since April 2019, the NMW has been £8.21 an hour for workers aged 25 and over. The government refers to this main rate as the National Living Wage.

Four minimum wages for younger workers and apprentices fall below this amount:

  •  £7.70 for 21-24-year-olds

  • £6.15 for 18-20-year-olds

  • £4.35 for under 18s

  • £3.90 for apprentices