BEIS release government evidence on National Minimum Wage compliance and enforcement

18 May 2022

The Department for Business, Energy and Industrial Strategy (BEIS) has released an overview of the compliance and enforcement action of the National Minimum Wage in 2020/21. HM Revenue and Customs (HMRC) are ultimately responsible for the enforcement of minimum wage regulations.

As the period covered by the report overlaps with the coronavirus and its associated restrictions, business activity and enforcement action changed considerably. Despite this, enforcement action sees strong results, with the following key take aways from the report;

  • HMRC closed over 2,700 cases
  • £16.8 million in arrears were identified
  • 580 penalties were issued, totalling £14.1 million
  • Enforcement action was targeted at sectors least impacted by Covid-19

HMRC also issued a number of emails, SMS messages and webinars following their “Promote, Prevent and Respond” approach.

Targeted enforcement is becoming the predominant way for HMRC to handle minimum wage breaches, with £14.5 million in arrears being paid to around 139,000 workers in 2020/21.

The report does note that furlough payments have made enforcement action more complex. With these payments not being for hours worked, they are not subject to minimum wage regulations. For this reason, many perceived underpayments may be compliant, potentially this is why sectors least affected by Covid-19 where prioritised.

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