Skip to content
Home » Blog » HR – Are your staff entitled to BACKPAY?

HR – Are your staff entitled to BACKPAY?

Based on a real case we are currently managing. Names, business details and terms have been changed for privacy.


The Scenario (July 2015)

Summer owns a beauty salon and employs eight members of staff. All are paid a basic hourly rate plus commission, based on individual sales.

Summer is happy with her team. They are good workers and she wants them to stay.


The Background

Summer employs:

  • Tracey (17)
    A trainee on a government apprenticeship scheme.
    Paid £2.50 per hour, working a minimum of 30 hours per week.

  • Melanie (19)
    In the second year of her apprenticeship.
    Paid £2.73 per hour for a minimum of 30 hours per week.
    Melanie queries her pay, but Summer insists it is correct.

  • Linda (16)
    A school leaver who started in June 2015.
    Her college apprenticeship does not start until September.
    Summer issues a normal employment contract and pays £3.79 per hour from July to August.
    When Linda starts her apprenticeship, her pay will revert to £2.73 per hour.

    (During this time, Summer becomes unsure if Linda should have been paid the apprenticeship rate from the start.)

  • Kirsty (24)
    The longest-serving employee.
    Paid £6.10 per hour plus commission.
    She earns approximately £8.00 per hour, well above minimum wage.

Summer also employs three additional beauticians and a salon manager.


The Facts Employers Should Know

Wages and Commission

  • Cash-in-hand payments and commission count as wages

  • They must be included when calculating:

    • National Minimum Wage

    • Tax

    • National Insurance

Tracey is not being paid the National Minimum Wage


Apprenticeship Rates

  • The apprentice minimum wage is £3.30 per hour

  • This applies to:

    • Apprentices aged 16–18

    • Apprentices aged 19+ in their first year

  • Being new or inexperienced does not remove entitlement

Melanie is not being paid the correct National Minimum Wage


Apprentices Over 19 (After Year One)

  • Apprentices aged 19+ who have completed their first year must be paid the age-related minimum wage

  • This rate is £5.30 per hour


Employment Contracts Matter

  • If a standard employment contract is issued, age-related minimum wage applies from day one

  • Apprenticeship rates apply only from the start of the apprenticeship

  • If an apprenticeship contract is issued from the start, the apprenticeship rate applies immediately

Linda is being paid correctly


Commission and Minimum Wage

  • Kirsty earns £6.10 per hour plus commission

  • Her total hourly earnings exceed the minimum wage for her age (£6.70)

Kirsty is being paid correctly


The Bigger Issue

The remaining four employees are also not being paid the current minimum wage.


The Outcome

Once employees discovered the issue:

  • Several staff members were extremely unhappy

  • Significant back pay was owed

  • Summer had to reimburse large sums

  • She was fined and publicly named by the government

  • Former employees contacted her to check if they were owed back pay

Summer also did not have:

  • Up-to-date contracts of employment

  • A company handbook


Legal Obligations for Employers

Employers must:

  • Pay at least the National Minimum Wage

  • Provide a written statement of employment particulars for employment lasting one month or more

All businesses with staff should have:

  • Up-to-date employment contracts

  • An employee handbook

  • Clear, accessible policies and procedures

These protect both employees and the business.


National Minimum Wage Updates (October 2015)

  • Over 21s: £6.50 → £6.70

  • Apprentices: £2.73 → £3.30

  • Ages 18–20: £5.13 → £5.30

  • Ages 16–17: £3.79 → £3.87


Why This Matters

  • In February 2015, 70 employers were named for failing to pay minimum wage

  • One care provider owed £37,500 to 184 workers

  • Employers faced fines and reputational damage

  • The National Living Wage launched in April 2016 at £7.20 per hour for workers aged 25+


Need HR Support?

If you’re worried this could affect your business, or you need help with HR compliance, we’re here to help.

📞 01903 688789
✉️ makeithappen@mbsmih.com

Our flexible HR packages include:

  • Fixed-fee retainers

  • One-off issue support

  • Project-based HR solutions

We provide all required legal documentation and help you manage people confidently, compliantly, and fairly.