The number of whistleblowers reporting their companies for violating National Minimum Wage laws has dropped to its lowest level in four years.
According to new research released by law firm Pinsent Masons, whistleblowing reports of National Minimum Wage violations has fallen to 2,488 this year.
This marks a small fall in the number of complaints with whistleblowing reports previously standing at 2,580 the year prior.
When investigating why whistleblower reporting has fallen to its lowest level in four years, this has been partially attributed to the impact of the furlough scheme.
Workers within industries such as hospitality and retail – whose salaries are often in line with the National Minimum Wage – are most likely to report their employers for not adhering to the rules.
However, the introduction of the Coronavirus Job Retention Scheme in March 2020 meant that industries which were forced to shut down in light of lockdown rules placed many employees on furlough.
Industries such as the Arts, entertainment and recreation sector (12 per cent) alongside the Accommodation and food services sectors (11 per cent) had the highest rates of furlough, as of 31st August 2021.
This, Pinsent Masons has argued, meant employees who were furloughed were less motivated to report their employers regarding transgressions of pay.
Alongside this, the law firm stated more companies have been conducting internal reviews to ensure they are paying the National Minimum Wage.
This comes after the Department for Business, Energy and Industrial Strategy, earlier this year, named and shamed almost 200 businesses for failing to pay staff according to the law. This included household names such as John Lewis, the Body Shop and Pret A Manger.
Responding to this, the HMRC previously warned that any employer deliberately or unapologetically underpaying their staff would face “hefty fines” and other enforcement action.
This also follows the Chancellor’s recent announcement of an increase to the National Living Wage, set to increase to £9.50 an hour in April 2022.
Neil Black, Employment Partner at Pinsent Masons, stated:
The recently announced rise to £9.50 from April next year will further increase the risk of non-compliance for low paid staff. Employers will need to ensure their existing checks and balances remain robust and compliant in the face of this rise.