Employers who fail to meet minimum wage to be named and shamed

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Employers who fail to meet minimum wage to be named and shamed

According to the BBC the Government has announced new plans regarding the payment of the National Minimum Wage, which will come into effect from October.

It is hoped that the new rules, and the damage that adverse publicity might bring, will embarrass firms into paying the statutory minimum rather than flouting the legislation.

Although the TUC estimates that up to 250,000 employees are still not being paid the minimum wage, to date only one company, a hairdresser in Leicester, has been named and shamed publicly by HMRC.

Jo Swinson, the Employment Relations Minister commented: “Paying less than the minimum wage is illegal. This gives a clear warning to rogue employers who ignore the rules, that they will face reputational consequences as well as a fine if they don’t pay the minimum wage.”

Under current rules, in order to be named, a company has to owe its employees over £2,000, with the average amount per worker set at £500. However these minimum restrictions will now be removed, allowing employers to be named more freely.

Current penalties for employers found to be flouting the HMRC rules on national minimum wage include not only having to pay back the amounts they owe but also a possible fine of up to £5,000.

High profile employers who have fallen foul of the HMRC rules include Arcadia, the owner of fashion retailer Top Shop, who had failed to pay interns the minimum wage.

In 2012 HMRC found that over 700 employers had failed, at some point during the year, to pay national minimum wage to their staff. As a result more than 26,500 workers received back-payment of owed salaries which totalled nearly £4m.