Underpaid UK workers receive £4m windfall

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pay increaseFollowing action by HM Revenue and Customs (HMRC), more than 26,000 workers denied the National Minimum Wage by their employers have received a £4m windfall.

It was revealed that the Government department investigated 1,693 complaints against employers for allegedly breaching minimum wage rules in 2012-13.

These investigations resulted in 708 employers receiving automatic penalty charges of up to £5,000 and 26,519 employees receiving an average of around £150 in back pay, topping up wages that had previously been below the legal minimum rate.

Employment Minister, Jo Swinson, said:

“Paying less than the minimum wage is totally unacceptable. Whenever we find examples of businesses breaking the law we will crack down on them.

“Supporting fairness in the workplace is one of our key priorities and the National Minimum Wage is one way of making sure this happens. It supports as many workers as possible without damaging their employment prospects, which is why effectively enforcing the minimum wage is critically important in making sure it stays a success.”

She continued:

“The figures from last year show that HMRC can really help people who have been underpaid to claim back the money they are owed.”

HMRC did not name any organisations which it had caught breaking the law, but did reveal details of cases where employers had been ordered to make back payments.

These included a national retailer which told employees to attend work before and after opening hours without pay, and was subsequently instructed to pay wage arrears of more than £193,000 to nearly 3,500 workers.

Another retailer, which specified that employees had to purchase particular items of clothing from its range as uniform, had to repay almost £170,000 to more than 6,000 staff.

It was also revealed that a major fashion chain was also ordered to pay 90 unpaid interns almost £60,000.

Michelle Wyer, Assistant Director of HMRC’s National Minimum Wage team, said:

“Paying the National Minimum Wage is not a choice – it’s the law. HMRC enforces the rules, protecting workers from rogue employers, ensuring they get at least the wage to which they are legally entitled.

“Where an employer ignores these rules, we will take steps to ensure arrears are paid out in full and the employer fined. In the most serious cases, criminal prosecution can follow.”

HMRC said that the majority of cases involving the abuse of minimum wage rules were dealt with using “civil penalty powers”, but warned that it would take criminal action and seek prosecution in more severe cases.

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