Companies who underpay employees set to be named and shamed

Posted on August 29th, 2013 | Categories - News

receiving moneyNew plans from the Government, will see firms who fail to pay their employees the national minimum wage named and shamed, in an ongoing crackdown on underpaying.

The Trades Union Congress (TUC), has estimated over a quarter of a million workers in the UK are being paid less than the national minimum wage. Although this practice it is already illegal, the Government hope the new rules, to be introduced in October, will embarrass underpaying firms into paying the required amount.

Past restrictions have made it difficult for companies to be named and shamed, but the new rules will make it easier for the Government to name the companies in question. Although, to be named under the new rules, the employer must owe their employees at least £2,000 and the average owed per employee must hit £500.

At present, only one employer has been named for paying less than the minimum wage.

Jo Swinson, Employment Relations Minister, said:” 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.” (Source: BBC)

TUC want more

Currently, employers, who are found to be in breach of the law, are forced to repay the amount they owe, along with penalties of up to £5,000.

Earlier this year, Arcadia, who owns high street store Top Shop, was one of eight other large companies forced to pay almost £200,000 to interns who were being underpaid; the minimum wage for an apprentice currently stands at £2.65 per hour, but rises slightly to £2.68 in October.

The national minimum wage currently stands at:

  • For under 18’s, the current minimum wage is £3.68 per hour, but will rise to 3.72 in October
  • For 18-20’s, the current minimum wage is £4.98 per hour, but will rise to £5.03 in October
  • For those 21 and over, the current minimum wage is £6.19 per hour, but will rise to £6.31 in October

Last year, HM Revenues and Customs (HMRC) revealed 736 companies underpaid their workers. But, following Government action, around 26,500 received the wages they were rightfully owed from their employer, totally some £3.9 million of back pay.

However, the TUC believe the problem is far greater than that being reported. They have revealed that thousands of people call the minimum wage helpline every year; but the union believes many employees are too scared to complain in public.

The TUC would like to see even more action from the Government; they believe an increase in the number of prosecutions and larger fines, would force underpaying companies to pay up and continue to pay the legal minimum.

The TUC General Secretary, Frances O’Grady said in a statement: “It is right to name and shame minimum wage rogues, so that other employers who think they can get away with paying illegal poverty wages get the message loud and clear that cheating does not pay.”

“At the moment all employers who have been found guilty of cheating workers out of a legal wage have to pay a financial penalty, but as this takes place behind closed doors, justice is not seen to be done.”

O’Grady continued: “But naming and shaming won’t be enough to deter those employers who think they are above the law. Only a handful of employers have been taken to court since the minimum wage was introduced in 1999, yet over the years thousands of workers have complained to the minimum wage helpline that they are being ripped off.”

“Employers need to know that there will be no hiding place if they break the law. The government must put more money into enforcement so that there are fewer places for even the most determined minimum wage cheats to hide.”

“We need to see more prosecutions and much higher fines imposed so that minimum wage crimes become a thing of the past.”

She concluded: “If we are to build a strong and sustainable recovery which benefits all working people, our vision must reach far beyond the minimum wage, which after all is just a floor on pay. Ministers should encourage all employers who can afford to pay a living wage to do so, and consider the introduction of new wages councils to press for decent pay rates across the economy.” (Source TUC)

HMRC are urging those who are not being paid the national minimum wage, to call their helpline on 0845 6000 678.