The Government has now published two sets of Regulations relating to the national minimum wage (NMW). One set of Regulations increases the maximum penalty for employers who fail to pay their workers the NMW to £20,000. The other creates a specific exemption from the NMW for workers undertaking one of the Government’s new ‘traineeships’ designed to help tackle youth unemployment. Both sets of Regulations came into force on 7 March 2014.
The National Minimum Wage (Variation of Financial Penalty) Regulations 2014 SI 2014/547 amend the figures specified in S.19A of the National Minimum Wage Act 1998 which are used to calculate financial penalties imposed for underpayment of the NMW. The financial penalty is calculated as a percentage of the total underpayment as set out in the notice of underpayment served on the employer by the NMW enforcement officer. The Regulations increase the percentage figure from 50 per cent to 100 per cent and increase the figure for the maximum financial penalty from £5,000 to £20,000. More details can be found in our 15 January news story.
The National Minimum Wage (Amendment) Regulations 2014 SI 2014/546 amend the National Minimum Wage Regulations 1999 SI 1999/584 so that a worker does not qualify for the NMW for work done as part of a traineeship in England. Since the introduction of the NMW in 1999 there have been exemptions for participants in government schemes or programmes that provide training and work experience. These Regulations make it explicit that any work done as part of a traineeship does not qualify for the NMW. Traineeships are skills programmes which last a maximum of six months, and are aimed at young people aged 16-23 without the skills or work experience needed to get a sustainable job. The age group for traineeships will be extended to include 24-year-olds from 2014/15.