Unions have called for more prosecutions and higher fines for employers who “deliberately flout the law”, after the UK Government “named and shamed” record numbers of “minimum wage dodgers”.
The Department for Business, Energy and Industrial Strategy has today (Wednesday) published a list of 360 businesses who failed to pay the UK’s lowest paid workers at least the minimum wage, with employers in the hairdressing, hospitality and retail sectors the most prolific offenders.
The list includes employers who attempted to cheat workers out of the so-called ‘National Living Wage’, which is currently £7.20 an hour for workers aged 25 and over.
Employers who are found to have underpaid workers are ordered to repay the arrears and could face fines of up to 200%, capped at £20,000 per worker.
15,520 workers were underpaid a total of £995,233. Penalties worth around £800,000 were imposed by the HMRC on employers who failed to pay workers the legal minimum, as well as recovering unpaid wages for workers.
An additional 1,500 cases are currently being investigated by HMRC and employers who are found to be underpaying staff will be named and shamed once these investigations are completed.
Business Minister Margot James said: “Every worker in the UK is entitled to at least the national minimum or living wage and this government will ensure they get it.
“That is why we have named and shamed more than 350 employers who failed to pay the legal minimum, sending the clear message to employers that minimum wage abuses will not go unpunished.”
Offenders usually only face prosecution and jail time in the most extreme of cases, despite the government insisting it is “committed to ensuring all employers are compliant with minimum wage legislation and the effective enforcement of it”.
The government also says it will be spending a record £25.3 million on minimum wage enforcement next year, but unions argue more could be done and that punishments need to be far more stringent.
TUC General Secretary Frances O’Grady said: “This should be a wake-up call for employers who value their reputation. If you cheat your staff out of the minimum wage you will be named and shamed.
“But we also need to see prosecutions and higher fines for the most serious offenders, especially those who deliberately flout the law.
“Minimum wage dodgers must have nowhere to hide. We need to see strong unions in every workplace to stop these abuses from happening.”
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Unite assistant general secretary Steve Turner said: “The government needs to crack down further on employers who failed to pay the national minimum wage to some of the most low-paid and vulnerable workers in the country.
“The fact that the government has mounted only 13 prosecutions for non-compliance since 2007 is pathetic. In America, bad bosses are jailed and heavily fined for ‘wage theft’ which is what this is, exploiting workers in such a shameful fashion.
“The fact that an established household name like Debenhams is on the list is appalling. This is a major retailer with a large HR department – how could such non-payment be overlooked for so long?
“If top executives with mega pay packets weren’t getting their bonuses paid on time, all hell would break loose.
“What the government has announced today is welcome, but is only a small step in the right direction and much more is needed.
“To address growing levels of poverty a genuine living wage must be introduced, sector level collective bargaining introduced and stronger more effective enforcement funded.
“This would mean proper resources for the agencies responsible for enforcement and the cuts they have suffered in recent years to be reversed.
“Unite believes that the government’s national minimum wage currently £7.20 an hour is already inadequate, pathetically low for those under 21 and leading to obscene levels of growing poverty in our communities. Unite strongly support a minimum living wage of £10 an hour.”
Unison general secretary Dave Prentis said: “This list fails to shame the larger care firms who are equally guilty of denying staff a fair wage. Those in the spotlight today are just the tip of the iceberg.
“HM Revenue & Customs needs to get much tougher with more inspections to identify scrooge employers.
“When a care firm breaks wage laws, the chances are it’s likely to cheating more than just a handful of its workers. Pay records must be checked thoroughly so all employees get the money they are owed.
“The government must insist that bosses stop duping staff with bafflingly complex payslips. Care companies must show workers how their pay is calculated and prove that at the very least they’re earning a legal wage.”
This article was updated at 23:46 (GMT) on 15 February 2017 to correct a factual error.