HMRC is continuing to carry out compliance checks across the farming industry to see that National Minimum Wage levels are being met, businesses have been warned.
The National Minimum Wage is the minimum pay per hour most workers in the UK are entitled to by law.
The rate varies depending on age and whether the person is an apprentice.
Most workers who are 25 or older must be paid at least the National Living Wage (NLW), which is the highest rate of the National Minimum Wage.
According to Saffery Champness, checks are also being made within the farming industry to see that correct allowances and deductions are being made.
In addition to having to pay the arrears, farm business employers could face a 200% non-negotiable penalty on underpayments, going back up to six years, for current and ex-employees.
Where the arrears total more than just £100, the employer will also be publicly named. The penalty is reduced by 50% where paid within 14 days.
The main NMW breaches made by farm employers relate to:
• Provision of benefits such as accommodation. Where rent-free accommodation is provided, the ‘accommodation offset’ is added to pay for NMW purposes, but any rent paid by the employee should be deducted.
• 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 is challenging whether individuals are truly volunteers or actually workers for NMW purposes. Any such arrangement needs to be very carefully worded.
Martyn Dobinson, a partner of Saffery Champness’ Landed Estates Group, said: “Penalties for non-compliance are severe and we are urging all employers to be aware, not just of the correct National Minimum Wage levels, but also to be sure that their records are correct and up to date.
“In the rural sector, there can be additional complications with casual workers and temporary staff – beaters employed on shoots, or seasonal agricultural workers, for example.”
The National Minimum Wage for over 25-year-olds is £8.21/hour, £7.70/hour (age 21 – 24); £6.15/hour (age 18 – 20); £4.35/hour (under 18); and £3.90/hour for the Apprentice National Minimum Wage.