Salon owners, are you paying your staff the correct wage?
The rates table below lists the National Minimum Wage effective from 1 April 2017. Salon and barber shop owners need to check that they’re paying their team the correct rate.
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Unsure of the regulations? NHF Members have access to our free round the clock employment law helpline and specialist advice on wages, tax and VAT to give you professional advice so you can be confident you’re not breaking the law.
Keep checking minimum wage rates
- NHF members, download and read the NHF’s guide to National Minimum Wage, it includes the things which are most likely to catch salons and barber shops out – apprenticeship rates, deductions, tips, what counts as working hours etc.
- Minimum Wage rates change every year so make sure you as the salon or barber shop owner keep up-to-date with the latest rates – just because you’ve checked them now doesn’t mean you don’t have to again for another year.
- Rates are age-based, so make sure you have details of employee’s birthdays.
Make sure your employee records are up to date
As the salon or barber shop owner have conversations with your team. Make sure you know when their birthdays are as this could make a difference to their pay. It is important to check in-between rate changes too, as employees may go up a rate when their birthday comes around in the year.
Is your salon system right for the job?
- Make sure your salon’s system can respond appropriately if someone has a birthday and needs to move to a new rate – will yours change automatically?
- Set up alerts – so you know when an apprentice aged 19 or over has been with you a year and needs a wage review.
- Does your accountant have the right information? Don’t rely on them to alert you to a possible underpayment, check yourself. HMRC fines salon owners, not payroll providers, if employees have not been paid correctly – remember it’s you that’s liable!
Catching hair and beauty business owners out
There are several instances which are catching hair, beauty and barber shop owners out for not paying the correct Minimum Wage
If you expect your stylists or therapists to attend a model night, or to be at work before the salon opens, you have to pay them for that time.
It is illegal to make up the minimum wage using tips.
If you have a stylist or therapist on the minimum wage and you make deductions for uniforms, scissors, tools and equipment which takes their hourly rate below the minimum wage – you’ve broken the law. Even if you don’t deduct the money from wages, but ask an employee to buy these items from their wages, HMRC will regard this as an underpayment.
Apprenticeships and the minimum wage
Apprenticeships complicate the minimum wage rates because the rate varies depending on their age and how far they have progressed through their apprenticeship. The apprenticeship rate applies to 16-18 year olds throughout their programme and to older employees aged 19 or over, only in the first year of their apprenticeship.
Apprenticeships – when are they complete?
An apprenticeship is complete when they have completed all parts of their programme in the current frameworks. If this is before the apprenticeship agreement ends, you then have to pay the age-related minimum wage.
What should I do if I’m paying the wrong rate?
If you’ve found you are paying the wrong rates to your employee’s, let HMRC know. Let them know what you’ve found and give them the commitment that you will put it right.
What happens if I don’t pay the correct Minimum Wage?
You run the risk that one of your employees or ex-employees will report you to HMRC. This could result in an investigation, resulting in fines of up to £20,000 per underpaid worker and being publicly ‘named and shamed’, which could have a significant impact on the reputation of your business.
FIND OUT MORE
The NHF has free round the clock employment law helpline and specialist advice on wages, tax and VAT to give members professional advice so they can be confident they’re not breaking the law.
Membership starts from just £144 for Solo Members – learn more about NHF membership here.