30th August 2007


 Issue No.  2007/21






In the first National Minimum Wage criminal prosecution, a children's nursery owner has been fined £2,500 and ordered to pay £500 costs after pleading guilty to an offence of obstruction: an offence under the National Minimum Wage Act.

The owner of the Day Nursery prevented HM Revenue & Customs (HMRC) compliance officers from accessing staff records.
At the hearing on 28th August 2007, the judge said the owner had "demonstrated a clear and deliberate intent to obstruct officers and this was a scandalous breach of the legislation".
This case acts as a reminder that it is not only the employee that could make a claim if they are not being paid the National Minimum Wage, but the HMRC can pursue a criminal prosecution against those employers suspected of flouting the National Minimum Wage law.
There are six potential criminal offences under the National Minimum Wage Act:
  • Employer refuses or wilfully neglects to pay National Minimum Wage
  • Person fails to keep or preserve records
  • Person knowingly causes or allows false entry in records
  • Person produces or furnishes false records or information
  • Person delays or obstructs compliance officer
  • Person refuses or neglects to answer any questions or produce documents for compliance officer
The maximum fine for each criminal offence under the National Minimum Wage is £5000.  Therefore to avoid a fine and criminal record, employers should check that their employees are being paid the National Minimum Wage (see below) and that appropriate pay records are being maintained.  
With effect from the 1st October 2007, the National Minimum Wage is to increase as follows:
1st OCTOBER 2007
Adult rate
£5.35 per hour
£5.52 per hour
Youth rate (18 - 21 or employees over 21 on an accredited training scheme)           
£4.45 per hour
£4.60 per hour
Rate for 16 and 17 year olds
£3.30 per hour
£3.40 per hour



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