Government Names and Shames on Wage Failure
Following our Insight earlier this week (The Living Wage: Are you ready?) about the introduction of the National Living Wage in April 2016, today, more than 90 employers, 10 in Scotland, have been “Named and Shamed”, for failing to pay their workers the National Minimum Wage the Business Minister, Nick Boles announced.
Between them, the 92 companies named by HMRC owed £1,873,712 in arrears. The sectors affected include hairdressing, social care, hospitality and security services.
Since the public naming scheme was introduced in October 2013, 490 employers have been named and shamed, with total arrears of over £3,000,000 and total penalties of over £1,100,000.
Today’s announcement and the proposed regulations remind us that the government is intent on ensuring compliance with the living wage. The new laws will mean the introduction of higher penalties, for noncompliance.
Failure to pay the minimum or living wage may result in both civil liability to make payment to workers and/or criminal penalties. Furthermore, BIS has recently announced a package of measures intended to improve compliance with national minimum wage legislation.
The proposed new living wage law doubles the potential penalty for non-payment from the current penalty of 100% of the worker’s underpayment to 200% from April 2016. The maximum civil penalty is £20,000 per worker. On criminal prosecution, a fine of up to £10,000 applies, with the possibility of company officials including a director, manager, member, secretary or other official being prosecuted as well as the employer.
Business Minister Nick Boles said today: “As a one nation government on the side of working people we are determined that everyone who is entitled to the National Minimum Wage receives it. There is no excuse for not paying staff the wages they’re entitled to.”
BIS already proposes to increasing the budget for the enforcement of the minimum wage and establishing a new team dedicated to pursuing the most serious cases of employers deliberating not paying or avoiding paying minimum wage.
This is a stark warning to employers. We can provide a living wage audit or review for employers to check compliance for lower paid workers, to make sure the laws are not breached.
Employers can’t afford not to.