Companies in IT sector ignorant of today's national minimum wage rise and risk £20k fine, says BIS

Department for Business, Innovation and Skills estimates four out of 10 companies in IT could be affected

The Department for Business, Innovation and Skills (BIS) has warned that many employers in the IT and telecoms sector remain ignorant of today's rise in the national minimum wage (NMW) and that they risk a hefty fine as a result.

As of today, the hourly UK NMW rises from £6.50 to £6.70 for 21-year-olds and over. For workers between the ages of 18 to 20 the NMW rises from £5.13 to £5.30, while those under 18 will see their pay increase from £3.79 to £3.87. Apprentices will see the largest rise in percentage terms (21 per cent): from £2.79 to £3.30 per hour.

Self-employed people running their own business, company directors, volunteers and students on work placements are not entitled to the NMW.

The new rates were set following consultation with employers, workers and their representatives, together with extensive research and analysis by the Low Pay Commission.

Around 40 per cent of companies in the IT and telecoms sector employ at least one person on the NMW, according to a survey of 1,000 people conducted by BIS. While this proportion is low compared to other sectors, for example retail, hospitality and cleaning, nevertheless many businesses in the sector are unaware of the impending rises, leaving them liable to fines of up to £20,000 per worker if they fail to implement the new pay scales.

According to the BIS survey, in the IT and telecommunications sector:

• 12 per cent didn't know what the hourly NMW rate would be from today;
• 49 per cent didn't know it is an offence not to pay NMW or falsify pay records;
• 58 per cent didn't know they must repay workers they have underpaid;
• 65 per cent didn't know companies could be named and shamed for not paying.

Figures released by the Low Pay Commission reveal that smaller companies employ a larger proportion of people on the NMW than large ones.

As of July 2015 the average salary in the IT sector was £40,194, or around £22.00 per hour.