‘There’s no underpayment too small to avoid National Minimum Wage investigation!’

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Here’s an important article from MIA business helpline partner, Croner

In their latest ‘name and shame’ campaign, the government have listed 230 employers who have failed to pay workers the National Minimum Wage. In total, 13,000 employees are set to receive compensation of a record £2 million for their loss of pay.

Addressing an all-too-common misconception, it has been revealed that 115 employers have been ‘named and shamed’ for failing to pay just one worker the minimum wage, highlighting the extent of the government’s investigations, and reiterating that any underpayment, regardless of its size, can attract significant attention.

In a similar light, 202 employers have been named for failing to pay up to five workers the legally required wage, and only four employers on the list have failed to pay over 100 workers.

With no sign of their investigation losing momentum, £25.3 million will be spent on minimum wage enforcement in 2017-18.

The government are currently investigating over 2,000 open cases, with eligible employers being named and shamed after an investigation is closed.

Darren Chadwick, Croner Chief Commercial Officer, says: “Despite the evident crackdown on pay, we are aware that thousands of workers are still not receiving their legal entitlement.

“Given the drive of the government’s enforcements, employers must act now to avoid detrimental damage to an organisation’s reputation by public shaming.

“In addition, it’s important to bear in mind that now employment tribunal fees have been removed completely, there is nothing to stop employees themselves escalating pay claims. It really is in an employer’s best interest to ascertain a correct pay structure is adopted throughout an organisation to avoid any risk of attracting the government’s attention, or facing a costly tribunal claim.”

Most Common Regions for Underpayments

The top three regions for underpayments are: the North West region with 36 employers failing to meet the National Minimum Wage, Yorkshire and Humber with 31 employers, and London with 20.

Most Common Sectors for Underpayments

The three most common industries failing to meet the wage are:

  • The hairdressing sector, with 59 employers failing to meet legal requirements. This sector has been found to owe nearly £121,000 to 195 workers.
  • Hospitality sector, with 50 employers owing over £77,600 to 224 workers.
  • The retail sector, with 22 employers owing almost £1.52 million in total to over 12,200 workers.

Outstanding Amounts for Employers

–              126 employers had to repay up to £1,000

–              98 employers had to repay between £1,000 – £10,000

–              8 employers had to repay between £10,000 – £50,000

–              1 employer (Argos) have had to repay over £1,000,000

As well as repaying the arrears, employers have also been fined a record £1.9 million by the government.

Croner are advising employers to review and address their pay structures now to avoid any risk of facing a tribunal in the near future.

The employment law advisors can discuss the details of specific scenarios with employers, and our Croner Reward pay experts are on hand to assist with organisational benchmarking, pay grades, and structures.

MIA members benefit from FREE advice from Croner.  Email alice@mia.org.uk or call 01403 800500 for the exclusive Business Support Helpline scheme number.

https://croner.co.uk/