'Technical issues' | Minimum wage breaches list exposes hidden payroll risks for HR

HR and payroll teams have been warned that administrative mistakes, salary deductions and working-time errors can expose employers to substantial penalties after more than 600 organisations were named for breaching minimum wage rules.

The employers collectively underpaid 27,617 workers by more than £4.2million, according to the Government’s latest naming list. The money has been returned to affected staff, while the businesses responsible have received penalties totalling around £7million.

However, employment lawyers cautioned that inclusion on the list does not necessarily mean an employer deliberately set out to pay workers below the legal minimum.

Many breaches can arise because deductions, salary sacrifice schemes, allowances or working-time calculations reduce an employee’s pay for minimum wage purposes, even where their headline hourly rate appears compliant.