All employers breaching NMW should be ‘named and shamed’
At least 300,000 people in the UK take home less than the national minimum wage (NMW), but only two employers have faced prosecution in the past four years, a report has found.
The report from the Centre for London and the Trust for London revealed that HM Revenue and Customs has investigated 10,777 employers since 2009 over allegations they had failed to pay staff the minimum wage. During that period, HMRC handed out £2.1 million in fines to employers and collected £15.8 million in wage arrears.
However, the research, based on unpublished figures, highlights how few employers have been “named and shamed” in the process calling it a systematic failure to enforce the rules.
The report calls for all employers in breach of the NMW to be publicly named to act as a deterrent to other employers, while legislation allowing the public naming of employers who flout the law has existed since January 2011. It also called for the removal of the maximum limit on fines for NMW noncompliance and for local authorities, which commission care workers for example, to ensure contractors pay their staff the minimum wage (including the time they spend travelling between appointments).
“Payment of at least the NMW is already required by statute, the threat of losing a multi-million pound contract if caught paying below the NMW is likely to be more persuasive than the risk of paying a negligible fine,” the report said. “The naming scheme has the potential to enable the public, including workers, prospective workers, customers and others to make informed choices about who they work for and where they buy their goods and services.”
TUC general secretary Frances O’Grady said: “There must be no hiding place for employers who try to cheat workers out of a legal wage and bosses who avoid paying the minimum wage should face prosecution, naming and shaming, as well as tough financial penalties.
“Whilst hard-pressed HM Revenue and Customs staff regularly recover more than £3 million a year for workers on illegal poverty pay, it is clear that far too many unscrupulous bosses are still getting away with ignoring the minimum wage. This means that around 300,000 workers across the UK are not being paid what they should be.”
Charles Cotton, CIPD reward advisor, said: “The NMW is the law and firms should comply with the law. Most do comply. Those that don't are either aware or unaware. I suspect that a lot of noncompliance may be around what those on apprenticeships or internships should get.”
“We need a campaign to alert individuals of their rights and employers of their responsibilities, CIPD has a role of in this campaign in highlighting to members what they have to pay apprenticeships and interns.”