Small and medium-sized businesses which employ young people over the summer could find themselves in trouble if they pay over the national minimum wage.

According to Personnel Today, law firm Wedlake Bell state companies who take on students and holiday staff could find themselves falling foul of current legislation if they are not aware of the rules.

David Israel, employment partner at Wedlake Bell told the magazine that this can often be a hazard to the hotel, restaurant and bar industry.

He added that if employers fully understood the risk it could discourage them from offering more competitive rates of pay.

"If they fear they could be caught out by paying above the national minimum wage … they may decide just to stick to the minimum wage simply to avoid any risk," he said.

The magazine also states that research by the British Retail Consortium recently revealed that 96 per cent of hospitality industry employees earned minimum wage.

A spokesman for the Campaign Against Age Discrimination in Employment recently said that employers also needed more education on the skills of older workers.

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