Apprenticeships, age discrimination and minimum wages

Apprenticeships, age discrimination and the national minimum wage can hit SME's hard

In April 2019, the National Minimum Wage (NMW) will be 20 years old. But age and the national minimum wage have been in the press recently for a very different reason. More than 200 businesses were named and shamed by the Government for failing to pay the national minimum wage, especially to younger members of staff, and had to pay £3.4m in back pay, fines and taxes.

To be fair to all businesses, payroll services for this group can be complex and difficult to get right. For example, the age and stage of the apprenticeship both affect the rate of pay which should be received.

For a young worker under 19 and in their first year of an apprenticeship, the rate of pay would be £3.70 per hour. But aged 19 or over, and in the second or third year of an apprenticeship, the rate of pay would be £7.05.

So, if your small business gets it wrong for any length of time - and perhaps for several young workers at the same time - it's easy to see how a substantial underpayment could occur.

But not if you employ a professional payroll services provider such as Proto Payroll.

To make matters even more complicated for the unsuspecting employer, ‘age’ is protected under equality legislation by the Equality Act 2010, so discriminating against an employee because of age is illegal, no matter what their level of work experience.

In reality, the various rates of pay were set by the Low Pay Commission, a government body set up to advise on appropriate rates for the national minimum wage.

The aim is to try to ensure a minimum qualify of life, be fair to all workers, and to prevent employers exploiting the workforce. Get it wrong and the costs surrounding tribunal fees or unfair dismissal claims can be very costly. But by using a professional payroll service provider, you can avoid all these pitfalls safe in the knowledge that your business is fully compliant.

Payroll services allow you the freedom to focus on growing your business saving you precious time and energy. The best way forward is to find one which offers a fully managed payroll service for start ups and small businesses so you have complete piece of mind.

Managing your payroll in-house is becoming more and more complex for small businesses. Perhaps the time has now come to outsource your payroll services?

We offer online payroll services throughout the UK and have the team, the time and the expertise to help you at Proto Payroll. For an informal chat, please email tom.hornbuckle@protopayroll.co.uk or complete a free quote using our payroll calculator on our website.