Government names latest round of firms underpaying NMW
05 August 2021
The latest list of companies who have failed to pay their staff at National Minimum Wage (NMW) level has been published.
This is round 17 of the naming scheme and contains the names of 191 companies who did not pay over 34,000 workers in line with NMW law, up to a total of £2.1 million. The list includes firms of all sizes, from a wide variety of sectors.
The firms were identified during investigations carried out by HMRC in relation to breaches that occurred between 2011 and 2018. Any of those employers named in the list have been made to pay back to workers what they owed, and additional fines were issued to the value of £3.2 million.
The government recognises that not all minimum wage underpayments are intentional, but employers must be aware of their responsibilities. Guidance on the topic of NMW can be accessed on GOV.UK.
There are some common causes of underpayment, and they relate to instances where workers who are paid at, or just above, the minimum wage rate, have some form of deduction taken from their pay, which takes them below the relevant rate. In a lot of cases, this may be for things such as uniform or accommodation. Employers also frequently fail to pay their workers for all the time they spend working, particularly where overtime is concerned. In addition to this, there are those businesses that pay an incorrect apprenticeship rate or who don’t understand how the minimum wage rate interacts with payment of apprentices.
The fines associated with failure to pay at NMW rates can be substantial. Financial penalties can be applied of up to 200% of arrears owed, capped at £20,000 per worker. Employers are also required to pay back the arrears they owe to workers at current minimum wage rates.
An educational bulletin has been published which should assist on the areas that have been identified as common causes of underpayment of NMW in the latest naming round.
There is also a website which will help workers to ensure they are being paid correctly. It is located here.
CIPP comment
The CIPP understands that the requirements of NMW can be very complex and some employers who try to do the right thing can still fail to meet their compliance obligations. What are your views on this? Is there anything more you think could be done to support employer compliance? Contact the Policy team, at [email protected].
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.