National Minimum Wage dodgers: comments from the community

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Business Minister Jo Swinson named and shamed a further 70 companies this week for failing to pay their staff the required £6.50 an hour set out by the National Minimum Wage.

This figure has been added to the 92 employers already targeted by the government since the new naming regime came into force in October 2013. They had total arrears of over £316,000 and total penalties of over £111,000.

Frances O’Grady, general secretary at the TUC, said:

“We welcome today’s list and encourage the government to make public the hundreds of other minimum wage cheats they know about as soon as possible. If we want to stamp out this criminal behaviour then all employers who under-pay their staff must be publicly named and shamed.

“We need more prosecutions and higher fines. Cheating bosses who fleece their workers out of their hard earned pay must end up in court.

“And there are still lots of under-paying employers who are getting away with it. More inspectors are needed so we can make sure that every single minimum wage cheat is caught.”

Professor Kim Hoque, professor of Human Resource Management at Warwick Business School, said:

“Failing to pay the national minimum wage represents a ‘PR disaster’ for firms found not to be compliant, and named and shamed. Another positive step is that the Government is to increase the maximum fine within the Small Business, Enterprise and Employment Bill, currently progressing through Parliament, from £5,000 to up to £20,000. Importantly, the new law will base fines on the number of employees underpaid rather than per infringement uncovered. Had this legislation already been in force when H&M was caught, it could in theory have been fined as much as £10.8 million.

“Being included on the list of ‘rogue employers’ could well send a signal to the labour market that these are not good companies to work for, given that if they lack the capability to ensure adherence to minimum wage laws, they may also lack the capability to ensure that employees are properly trained and developed, are provided with suitable career opportunities, and are provided with interesting and rewarding jobs. This may affect not just people looking for jobs in the lower reaches of the organisation, but those seeking positions higher up as well.

“Also important is the role that HMRC is playing in the care sector in raising awareness of the minimum wage with employers and care workers. As a part of this, the HMRC might also usefully seek to emphasise to firms the benefits of paying the minimum wage and that it need not simply represent a cost.

“For example, if employers pay higher rates, the additional costs involved will be offset by lower quit rates, lower absenteeism rates and higher levels of workforce motivation. Paying workers properly will also have a positive effect on commitment, which in turn will reduce monitoring and supervision costs, and raise productivity. A more rigorous enforcement of the rules also has the potential to encourage employers to invest in training in order to raise workforce productivity, and it may also stimulate employers to organise work processes more effectively.”

Danny Clarke, head of occupational health and safety at ELAS said:

“It is disappointing to see that a significant number of businesses across the UK are not paying their employees fairly by not offering them the national minimum wage, and the announcement today has again confirmed that not paying this practice is still all too common – particularly in the care and retail/hospitality industries.

“To pay workers below the national minimum wage is a criminal offence which may result in a criminal record for both the company and the senior managers. If employing someone at minimum wage, bosses need to be aware of commonplace practices that could fall foul of the law. For example, asking staff to work even one minute more than their contracted hours unpaid will mean their rate falls below the mandated wage. This and similar issues can cause employers to be in breach of the law and, rather than fining them heavily or meting out other punitive sanctions, the Government should be encouraging businesses to seek support.

“Ultimately, offering a fair wage will reward employers with a productive staff, and so not only is cutting corners when it comes to national minimum wage breaking the law, but if sadly it is being done intentionally, it is also a false economy.”

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  1. A company that fail to pay the minimum wage to their workers should compensate their workers and repay the money that they owe.

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