Small businesses are lacking basic employment knowledge according to Croner, based on telephone calls made to its business support helpline.

Croner has highlighted the five most common management myths that could catch employers out. These include the belief that small firms are exempt from paying the minimum wage, and the belief that there is no contract of employment when there is nothing written down.

Alan Phillips, employment manager of the Business Support Helpline, says: “The myths we have identified are commonplace in business practice, but in actual fact are little more than old wives’ tales.

“Most employers are unlikely to flout the law deliberately and many are probably unaware of the error of their ways. That is why we’re advising them to consider their employment practices now, rather than make mistakes that could cost them dearly later,” he adds.