Record £2 million in back pay identified on lastest list of national minimum wage offenders

Around 230 employers have been named and shamed for underpaying their workers the national minimum wage (NMW) or national living wage (NLW). This is the 12th “naming and shaming” list to have been published and it covers more than 13,000 UK workers and means they will now collectively receive around £2 million in back pay. In addition to paying workers back the money they are owed, employers named on the list have been fined a record £1.9 million by the government. Retail, hairdressing and hospitality businesses were among the most prolific offenders. Common errors made by employers included deducting money from salary to pay for uniforms, failing to account for overtime hours and wrongly paying the apprentice rates to workers.

The largest employer named on the list was Argos Limited, which failed to pay £1,461,881 to 12,176 workers. Argos admitted that workers had been required to attend morning briefings before their shifts started and security searches at the end of their shifts, for which they had not been paid.

Since 2013, the naming and shaming scheme has identified £6 million in back pay for 40,000 workers, with 1,200 employers having been fined £4 million. There are also currently around 2,000 open cases which HMRC is investigating. Employers will be named and shamed after their cases have been closed.

The scheme is one of a range of tools at the government’s disposal to tackle NMW and NLW abuse. Employers who pay workers less than the NMW or NLW not only have to pay back arrears of wages to the worker at current NMW/NLW rates but they also face financial penalties of up to 200% of arrears, capped at £20,000 per worker. In the most serious cases, employers can be prosecuted. In November 2016, labour market enforcement undertakings and orders came into force which can ultimately lead to criminal prosecutions and prison sentences of up to two years for employers who mistreat their workers, including NMW and NLW violations. The new Director of Labour Market Enforcement published his introductory report in July 2017, setting out the areas he will be focusing on in the coming months, including ensuring enforcement agencies are ready to use the new undertakings and orders to jail rogue employers.

The government has committed £25.3 million for NMW/NLW enforcement in 2017/18, up from £20 million in 2016/17.

Posted in Employment Law

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