The government have released their latest list naming employers who have underpaid minimum wage to their workers.
The Department for Business, Energy and Industrial Strategy introduced a strict ‘naming and shaming’ scheme in 2013. This scheme publicly names employers who have failed to pay workers the correct National Minimum or Living Wage. These employers will receive a Notice of Underpayment and, unless they fall within an exceptional criteria or have arrears of £100 or less, will be publicly named. Since the scheme was introduced, 1,500 employers have been listed for failing to pay 58,000 workers £8 million in pay.
The latest list, released on the 8th December 2017, named 260 employers. These range from small employers who have failed to pay one member of staff correctly, to large employers such as Primark who failed to pay 9,735 staff their legal entitlement. In total, over 16,400 workers were identified as being underpaid; the largest number of workers since the scheme began. Underpayments totalling £1.76 million were owed to these workers and employers received fines of over £1.3 million.
The most common excuses given by employers for failing to pay their workers correctly included not paying for travel time between jobs, deducting money to pay for uniforms and failing to pay overtime correctly. Employers within the hospitality, hairdressing and retails sectors were identified as those most prolific for underpaying their staff.
In addition to the naming and shaming scheme, employers will be required to make good any underpayments and can also face a fine of up to 200% of the arrears, capped at £20,000 per worker. HMRC are currently investigating 2,500 other cases of underpayments and these employers may also be named and shamed once the investigation is complete.
Your clients and all other employers need to ensure they’re paying their workers at least the National Minimum or Living Wage, on average, for each hour worked. Any unpaid practices, such as bag searches or travel time, need to be reviewed to check whether these are taking pay below the legal minimum. In addition, your clients need to be aware of the new minimum wage rates that will take effect from next April. They may need to give workers a pay increase, especially where staff are only just receiving more than the current minimum wage rates or are moving between the different bands of the minimum wage.
