In a recent statement in the Financial Times, the Prime Minister said, there would be much higher penalties for employers who fail to pay the National Minimum Wage (NMW).
“We are (also) clamping down on those who employ people below the minimum wage. They will pay the price with a fine of up to £20,000 for every under-paid employee – more than four times the fine today.”
HMRC administers and enforces the NMW on behalf of the Department for Business Innovation and Skills (BIS). In this blog, I thought I’d highlight a change to the way that employers who receive a Notice of Underpayment are dealt with - so that your clients can avoid damaging their reputation, or the possibility of high fines.
The Pay and Work Rights Helpline passes complaints to our NMW team, who tackle non-compliance by a variety of employers, ranging from large national retailers to small local businesses. Every single complaint is examined. Last year, out of 2645 referrals, arrears were identified in 736. Examples include a national retailer who made employees work before and after opening hours without pay; a multi-outlet retailer who required staff to buy specific items from their clothing range; and a major fashion chain found to have 90 unpaid interns.
Sometimes failures to pay the right amount are deliberate, but at other times the employer may have simply misunderstood what’s required of them. Since 2011, BIS have been able to ‘name and shame’ employers (but only if their behaviour met certain conditions) and they have only named one employer since the scheme started. But from October 2013, these restrictions have been removed. Now, every employer who receives HMRC’s Notice of Underpayment will have their details published, even if their actions were unintentional.
We expect that details will be published in most cases – but employers can appeal against this. BIS will consider whether naming would carry risk of personal harm to an individual or a family member, pose a national security threat, or otherwise not be in the public interest.
We don’t want publication – or fines – to happen; your clients can find out all they need to know about NMW here: https://www.gov.uk/national-minimum-wage