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Failing to do the bare minimum on wages

Published 09 August 2021

It’s been revealed some employers are still short changing staff by not paying the minimum wage and the list of shame of those doing so includes some well-known names.

The National Minimum Wage (NMW) introduced in April 1999 is the minimum pay per hour almost all workers are entitled to.

The minimum wage a worker should get depends on their age and if they are an apprentice.

Regardless of the size of an employer, it is still required by law to pay the correct minimum wage.

Government documents released recently listed nearly 200 employers breaking minimum wage laws (1)

It revealed a total of £2.1m was owed to over 34,000 workers.

The breaches took place between 2011 and 2018. The employers named and shamed have been made to pay back what they owe and fined £3.2m.

Some high profile names on the list of included:

  • John Lewis plc failed to pay £941,355.67 to 19,392 workers.
  • The Sheffield United Football Club Limited, failed to pay £21,802.17 to 25 workers.
  • Enterprise Rent-A-Car UK Limited, failed to pay £25,438.82 to 65 workers.
  • One Stop Stores Limited, failed to pay £56,505.04 to 2,631 workers.
  • Welcome Break Holdings Limited, failed to pay £49,031.77 to 1,591 workers.

Small firms on the list included car washes, nurseries and hairdressers.

People classed as ‘workers’ – if they have a contract or other arrangement to do work or services personally for a reward - must be at least school leaving age to get the NMW (2)

They must be 23 or over to get the National Living Wage, which is higher than the NMW.

These rates are for the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those of at least school leaving age). The rates change on 1 April every year (3)

Apprentice - £4.30

Under 18 - £4.62

18 to 20 - £6.56

21 to 22 - £8.36

23 and over - £8.91

Anyone can report an employer to HMRC (HM Revenue & Customs) for not paying the minimum wage (4) The initial report can be anonymous.

If HMRC finds that an employer has not paid at least the minimum wage, it can make a business pay back what it owes and issue a fine.

The most serious cases of non-compliance, for example producing false records or refusing to answer questions from a compliance officer, can lead to criminal prosecution. The potential penalty on conviction is an unlimited fine.

Since the beginning of 2010 there have been a total of seven prosecutions for breaches of NMW law (5)

A number of recent and ongoing court cases may have important implications for minimum wage rules and the enforcement regime.

Following a Supreme Court judgement earlier this year Uber agreed to give its UK drivers a guaranteed minimum wage (6)

In a five-year legal battle Uber had maintained it was a third-party booking agent, and its drivers were self-employed, which meant they were not entitled to NMW.

The ruling opens the possibility of other gig economy employers making similar changes and could ultimately lead to a wide range of workers previously classed as self-employed being redefined as workers, with eligibility for the NMW.

In March another Supreme Court ruling rejected a claim that care staff should get the NMW for nightshifts even if they are asleep (7)

The Court concluded there was an exemption in NMW legislation which applied to sleep-ins, as ‘sleep-in workers... are not doing time work for the purposes of the national minimum wage if they are not awake’.

When the NMW was introduced over two decades ago the aim was to raise it as high as possible each year without causing unemployment.

Initially the main rate applied to workers aged 22 and over and there was a separate rate for those aged 18-21.

A 16-17 Year old rate was introduced in 2004, and in 2010 the apprentice rate was introduced and 21 year olds became eligible for the adult rate of the NMW.

References

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