According to figures released last month by the government, a record number of workers were underpaid the National Minimum Wage (NMW) this year by their employers.
The number of workers identified as underpaid was double that in 2016/17 and the highest number since the NMW came into force. In all Her Majesty’s Revenue and Customs (HMRC is the enforcement agency for the NMW) identified £15.6 million worth of underpayments.
The year also set a new record for penalties issued by the government, with £14 million in fines issued to employers. More than 600 employers who were found to have underpaid their workers the minimum wage were named in 2017/18. This is the largest number in any single year since the scheme began in 2014.
The rise in cases follows increased efforts by HMRC to promote compliance and improve employer awareness of the minimum wage. In addition, over the past year, 56 employers took advantage of a pilot scheme in which employers were encouraged to come forward outside of an investigation. This resulted in nearly £250,000 in arrears being declared for just under 700 workers.
This year, the HMRC prioritised the social care, retail, commercial warehousing and gig economy sectors for enforcement of the minimum wage, alongside employment agencies, apprentices and migrant workers, the main reason being that these are the sectors where non-compliance is widespread. Just over 1,600 such cases were opened in 2017/18 – a 27 per cent increase compared to 2016/17 – with £3.8 million of the total £15.6 million of underpayments identified in these cases.
The government also continues to publish regular “naming” lists of employers who are found to have underpaid their workers the minimum wage. As of July 2018, 1,957 employers have been named since the scheme began, with over 600 employers named in 2017/18 alone (233 in August 2017, 260 in December 2017 and 179 in March 2018.
If you think your employer might be underpaying you, get advice and guidance on the government website. Workers should also seek advice from their union or workplace experts Acas.
Matthew Pull of Thompsons Solicitors commented: “The increased level of enforcement activity has undoubtedly been boosted by the increased resources provided to HMRC by central Government. Whilst this is encouraging for as long as it is maintained, (and we would hope this would be until all workers are in receipt of not only the National Minimum Wage, but the National Living Wage) it does raise the question of how much more could have been achieved had such increased resources been allocated to HMRC at an earlier stage.”
The report in full can be found on the government website.