Call to improve National Minimum Wage enforcement

08 January 2015

The TUC have issued a report publicising some of the “scams” used to avoid paying the National Minimum Wage (NMW), and calling for stronger enforcement.

The report confirms that most employers are happy to pay their employees at or above the NMW, but that a minority have developed “a wide range of scams, including under-recording hours, bogus self-employment, misusing interns and volunteers, charging for uniforms, not paying for travel between work sites during the working day, clocking workers off when there are no customers in the store or cafe, and employers vanishing to avoid minimum wage fines only to reappear under another name.”

The report estimates that 250,000 workers are paid at less than the NMW. It also identifies ten groups of workers who are particularly at risk of underpayment: apprentices, migrant workers, domestic workers, interns and bogus volunteers, false self-employment, zero-hours contracts including temporary agency workers, social care, workers whose accommodation is dependent on their job, seafarers, and umbrella employment schemes.

The TUC plan outlines a 10-point programme of continuous improvement during the next parliament:

· Restore the budget for raising awareness about the minimum wage to £1 million.

· Hire 100 more HM Revenue and Customs (HMRC) enforcement officers

· Better official guidance on the minimum wage so that employers know their responsibilities.

· Create legal gateways so that HMRC can share information about enforcement with local authorities and the transport regulatory authorities

· Name and shame all non-payers.

· Government to guarantee arrears if employer goes bankrupt or simply vanishes.

· Adopt a prosecution strategy targeted towards the worst offenders and increase maximum fine from £5,000 to £75,000.

· More targeted enforcement for high-risk sectors.

· Make government funding for training apprentices dependent on employers paying the minimum wage, and create a duty for training providers to check that the minimum wage is paid.

· Promote collective bargaining so that trade unions can deal with more minimum wage problems themselves.

TUC General Secretary Frances O’Grady said: “Failing to pay the minimum wage is an antisocial act that squeezes those workers who have the least. There should be no hiding place for cheapskate bosses who try to cheat their workers out of the minimum wage.”