Salon owners, are you paying your staff the correct wage?
You may think you know the National Minimum Wage rates but with the government targeting the hair, beauty and barbering industry, spend a few minutes double-checking your payroll to make sure you don’t get a fine of up to £20,000 per underpaid worker.”
First things first, what are the rates?
The rates tabled below are the rates from 1 October 2016 to 31 March 2017. Salon and barbershop owners need to check that they’re paying their employed members of staff the correct rate. The next rate rise will be on 1 April 2017.
Reminder: From April 2016 employees 25 and over (and not in the first year of an apprenticeship) must be paid the National Living Wage which is £7.20 per hour. Rates will increase on 1 April 2017.
- If you’re a member, read the NHF’s guide to National Minimum Wage, it features the things which are most likely to catch salons and barbershops out – apprenticeship rates, deductions, tips, what counts as working hours and so on.
- Minimum wage rates change every year so be sure you can keep up-to-date with the latest rates – just because you’ve checked them now doesn’t mean you don’t have to again.
- Rates are broadly age-based, so make sure you have details of employees’ birthdays.
Is your system right for the job?
- Make sure your 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 wait for 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.
Check offsets or exclusions
Various offsets, wage deductions or payments can affect minimum wage pay. For example, if you deduct the cost of a uniform from an employee’s pay or require them to buy such items, these reduce their pay and may take them below the minimum wage. It is also worth being aware any accommodation provided by you for an employee can be taken into account too.
Talk to your employees and make sure your records are up to date
Get out on to the salon floor and have conversations with employees. Make sure you know when their birthdays are as this could make a difference to their pay. Before there is a rate change make all your team know of the change and that they will see a difference in their wages. As well as helping to motivate the team, it shows you are on the ball when it comes to pay entitlement and employees know they are getting paid what they should.
Don’t forget other people’s wages
It’s probably the last thing you want to hear, but if minimum wage staff are seeing their pay go up, don’t ignore the wages of your other staff. Raising the minimum wage year after year erodes differences in pay between senior and more junior staff so it’s worth checking pay across the board.
What should I do if I’m getting it wrong?
So if you’ve noticed you’ve done something wrong, work out the amount you have underpaid and use your next RTI return to pay any arrears, which are payable at the current rates. Notify HMRC explain the situation and that you’re taking the appropriate steps to correct the errors.
HOW THE NHF CAN HELP
Call the NHF membership team on 01234 831965 if you have any queries or need any help in checking whether your employees are being paid the correct rate.
HMRC provide a free tool for you to calculate that you’re paying your employees the correct National Minimum Wage and National Living Wage.