Newbury businesses speak out after being shamed over minimum wage
Abacus Day Nursery, Oxford Road, and Julian’s Hair Salon, Inches Yard, were two of the 37 businesses nationwide named on Thursday.
The Government had released a list of all those businesses investigated by HM Revenue and Customs following complaints made via its pay and work rights helpline.
Julian’s was said to have underpaid a worker by £2,131.35, and Abacus Day Nursery allegedly owed £12,904.19 to eight workers.
The national minimum wage requires adults aged 21 and above to be paid at least £6.50 per hour, those aged 18 to 20 £5.13 per hour and 16- and 17-year-olds, £3.39 per hour.
Apprentices aged 16 to 18, and those aged 19 and over who are in their first year of an apprenticeship, must make at least £2.73 an hour.
Older apprentices are entitled to the standard minimum wage for their age.
A salary sacrifice scheme offered at Abacus Day Nursery, which allowed employees to take a lower salary in return for childcare at the centre, was the reason it was named in the list.
A statement released by the nursery said: “We are appalled to be included on this list. We offered our staff discounted childcare through a salary sacrifice scheme. Those who decided to receive this benefit did so voluntarily.
“A small number of employees who benefited from the scheme were deemed by HMRC to have fallen below the minimum wage, in spite of their actual salary being above it.”
It has now stopped running the scheme.
Meanwhile, the owner of Julian’s Hair Salon, Duncan McClure Fisher, said that the underpayment of an apprentice was a result of complex and confusing regulations on the payment of apprenticeships.
He said that, because of illness, the apprentice in question, who has not been named, took longer than the target of one year to complete her level two hairdressing qualifications.
It took her an additional four months to pass during, which time, according to Government policy, she should have been paid the standard minimum wage for a 19-year-old, and then reduced back to the apprentice rate once she had begun her level three qualifications, rather than being kept on the apprentice rate throughout.
“This wasn’t something we were aware of,” said Mr McClure Fisher.
He added that the Government should support companies in ensuring trainees were capable and confident enough to continue to the next level of their qualifications.
The current regulations were likely to entice businesses to rush candidates through to avoid increased wage costs should qualifications overrun.
“It puts a lot of pressure on the business, the staff training them and on the team to make sure that they pass,” he said. “I’m not an unscrupulous business owner. We made a mistake. People make mistakes in business. It’s a PR stunt. The Government is trying to demonstrate that they are getting tough on businesses.”
In a letter written by business minister Jo Swinson to Mr McClure Fisher’s MP John Howell (Henley) acknowledged that the apprentice legislation was complex. and said the Government was taking action to simplify it “to support employers who take on apprentices and improve compliance”.