CIPP survey: Establishing a new Single Enforcement Body for employment rights
18 September 2019
The CIPP policy team have produced a survey to gather your views on the consultation that considers the creation of a Single Enforcement Body for employment rights.
The survey will close on the 23 September.
The Director of Labour Market Enforcement (DLME) has improved the co-ordination of the Employment Agency Standards (EAS), the Gangmasters and Labour Abuse Authority (GLAA) and HMRC National Minimum Wage team (HMRC-NMW) but the current state enforcement of employment rights landscape remains hugely fragmented with a number of organisations having involvement in ensuring good compliance and recompense for the worker.
The Department for Business, Energy and Industrial Strategy (BEIS) is exploring, through this consultation, whether there is a case to be made for creating a single labour market enforcement body to deliver:
- Extended state enforcement
- A strong, recognisable single brand
- Better support for businesses
- Pooled intelligence
- More effective use of resources
- Coordinated enforcement action
- Closer working with other enforcement partners which would include the police, immigration enforcement, benefit fraud, health.
The survey focuses on some, but not all, of the questions arising from the four chapters. We recommend that you have the consultation paper alongside you, which will provide all of the background detail. In summary:
Proposed Core remit
If created the new Single Enforcement Body would, as a minimum, have responsibility for the areas that sit under the DLME as well as areas where the government has committed to state enforcement such as Umbrella companies (which aren’t currently regulated in the same way that Agencies are) and enforcing holiday pay for vulnerable workers – the government has committed to legislating for the state to have a role in supporting vulnerable workers (definition of vulnerable yet to be confirmed).
In addition, it would also take on the strategy and information hub functions currently within the Office of the DLME.
The definition of vulnerable worker for the purpose of enforcing holiday pay entitlement has yet to be published.
Statutory Sick Pay (SSP)
HMRC currently run a dispute resolution process through its statutory payments dispute team for individuals who believe they have been wrongly denied statutory sick pay. Once contacted by the individual HMRC then check whether the individual is entitled to statutory sick pay. If they are found to be eligible, HMRC will write to the employer to resolve the dispute.
If the employer refuses to pay, HMRC will, once the appeals process has been exhausted, make a payment of any outstanding amount due to the individual and can impose a penalty on the employer. Appeals can be made to the Tax Tribunal.
The process generally has a high success rate in dealing with disputes, with 90% of complaints resolved following a letter from HMRC. However, it is reliant on an individual being aware that they are entitled to SSP and that they can go to HMRC to raise a dispute.
The Department for Work and Pensions (DWP) is responsible for policy on statutory sick pay, and it is considering reforms, including options to strengthen enforcement. In this case, a new single enforcement body may be better placed to take on this role.
The approach to enforcement
In the DLME 2018/19 Strategy, an approach to enforcement looked at the benefits to be gained from a mix of two theories i.e. compliance and deterrence. Whilst the Government supports this approach it is recognised that the different enforcement bodies all take different approaches to enforcement, mixing compliance and deterrence to different degrees, and with different emphasis.
A single enforcement body could support compliance by:
- Increasing awareness of employment rights by providing employers with coordinated guidance and support across all state-enforced areas
- Taking a more consistent, proportionate approach to breached at the ‘lower harm’ end of the spectrum with a focus on education and the use of nudge techniques
A new single body could build on the work of the existing enforcement bodies by providing more technical guidance and targeted outreach to high-risk sectors and vulnerable groups – driven by intelligence and data.
Powers and sanctions
Currently, a wide range of different powers exists for the existing enforcement bodies.
Government propose that a new civil penalties regime is introduced for the GLAA and EAS to provide a middle ground of non-compliance and to be used where arrears of wages are involved. The penalties would be set at the same level as NMW penalties – 200% of arrears – with a minimum penalty of £100 and maximum of £20,000 per workers. As with NMW, there would be a 50% reduction where arrears and penalties are paid within 14 days.
It is estimated that it will take approximately 15 minutes to complete our survey. Thank you for taking the time to provide your valued views and experience. As mentioned, it would be useful to have the consultation paper alongside you, to provide all of the background detail.
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