Hotelier Anthony Lloyd could be issued with a notice of underpayment of up to £25,000 from HMRC for failing to pay some of his employees National Minimum Wage (NMW).
Lloyd, managing director of Fallowfields country house hotel and restaurant has been in correspondence with compliance officers, who enforce the NMW, for the nearly a year since they carried out an inspection.
Compliance officers may carry out inspections of employers at any time and there is no requirement for them to provide reasons for doing so.
The NMW legislation includes an accommodation offset figure for accommodation provided by employers for low paid workers, which can be taken into account when calculating the minimum wage.
The inspection found that Lloyd had been charging his employee-tenants a higher rate of rent than the accommodation offset rate (currently £5.08 a day or £35.56 a week) which effectively meant they were no longer earning minimum wage.
Lloyd claims he was not aware of the legislation at the time and the first he knew of it was when the inspection was carried out.
He said he feels the NMW legislation discriminates against employer-landlords, such as him, as they are unable to charge rent at the market rate like private landlords.
A letter from compliance officers advised him that he would be issued with the notice of underpayment on 15 June 2015 but, as yet, he has not received it.
Lloyd said: "Once I receive the notice of underpayment there are clearly interesting connotations for a small business such as mine.
"I think this is an issue for our industry, unless I am the only dodo who didn't know about it?
"According to the legislation, I am guilty. The issue I am taking up is the fact the legislation is a form of discrimination against employer-landlords. It's unfair and the law shouldn't be discriminatory against a business or individual.
"There appears to be no way out and I believe it's a major issue for employers who are property owners. If I have to pay the £25,000 I might have to change the way I staff my business.
"As I believe this is a problem to our industry I think it's important to let people know."
Lloyd said he felt the legislation should be changed and was disappointed the government's Red Tape Challenge had not recognised this discrimination.
Martin Couchman deputy chief executive of the British Hospitality Association (BHA) said the issue surrounding the accommodation offset charges was something the association has been dealing with since 1999 when the minimum wage was introduced.
He said: "Hoteliers have been arguing for many years that the accommodation offset should be set at the market rate. It's been a long battle but some progress has been made.
"The rules are pretty tough and the fines for non-compliance have just been increased."
In October this year the accommodation offset rate will be increasing by 5.3% from £5.08 a day to £5.35. Minimum wage will be increasing by 3% from £6.50 to £6.70.
Pictured: Peta and Anthony Lloyd, owners of Fallowfields
National Minimum Wage: Accommodation
•Accommodation provided by an employer can be taken into account when calculating the minimum wage.
•The offset rate for accommodation charges is £5.08 a day or £35.56 a week.
•If an employer charges more than the accommodation offset amount the difference is taken off the worker's pay which counts for the minimum wage.
•If the accommodation charge is at or below the offset rate, there is no effect on the worker's pay.
•If the accommodation is free, the offset rate is added to the worker's pay.
•It doesn't matter if the cost of the accommodation is taken from the worker's wages beforehand or if the worker pays the cost after they get their wages.
•Employers can charge more than the accommodation offset amount but must ensure the worker is not paid less than the NMW once this has been taken into account.
•HMRC have compliance officers who enforce the NMW, or a worker could make their own claim in a tribunal or a court.
•HMRC compliance officers may carry out inspections of employers at any time. There is no requirement to provide reasons for an inspection.
•Compliance officers can issue a notice of underpayment if they feel an employer has failed to pay at least the NMW to a worker.