Under new regulations which were introduced in October last year, 25 employers have been ‘named and shamed’ by the government due to their failure to pay employees the minimum wage. This unveiling of under-payers is part of the crackdown the government has decided to have against employers who violate the minimum wage law. However, the companies which have been exposed represent less than 1% of the problem, with their fines totalling to just £43,000 of the £4.6 million that HM Revenue and Customs claim is due in arrears.
The national minimum wage for those 21 and over presently sits at £6.31 an hour but is expected to increase to £6.50 in the autumn of this year. In some cases the employers who have been caught were paying other employees high salaries, and yet they were failing to provide their low-paid workers with the minimum wage. Over the course of the year, HMRC have distributed 650 fines amounting to £815,000 and investigated over 1,400 cases. This along with the evidence in the Government’s Low Pay Commission’s report clearly shows that there has been a significant drop in the number of companies who are adhering to the national minimum wage.
The 25 revealed under-payers shared a penalty of £21,000 between them, but new measures are being considered that will instead see such employers having to pay £20,000 fines, per employee who isn’t receiving the minimum wage. So rather than facing a four figure sum, if an employer is underpaying five members of staff, they will be looking at a penalty of £100,000. This increase in fines alongside the policy of ‘naming and shaming’ should be a sufficient deterrent for employers who are tempted to break the minimum wage law, as they risk both significantly damaging their reputation and receiving a hefty financial penalty.
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