As discussed in a previous blog, Business Secretary Vince Cable has begun the naming and shaming of Employers who fail to pay their employees the correct National Minimum Wage (“NMW”). Five employers have already been named under the new rules, between them owing over £6,800 in arrears. The financial penalties totalled £3,381.40. They were thoroughly investigated by the HMRC after workers made complaints to the confidential Pay and Work Rights helpline.
Mr Cable commented:
“Paying less than the minimum wage is illegal. If employers break the law they need to know that they will face tough consequences.
We know that people are put off using a business’ service if it is found guilty of not paying its workers the minimum wage. This is a clear warning to employers: you will damage your reputation and face a stiff penalty, if you don’t pay the minimum wage.
Any worker who is entitled to the minimum wage should receive it. It’s not only fair, it’s the law. If anyone suspects they are not being paid the wage they are legally entitled to they should call the Pay and Work Rights helpline.”
The 5 employers are:
- Peter Oakes of Peter Oakes Ltd, Macclesfield – neglected to pay £3,619.70 to 2 workers;
- Lisa Maria Cathcart of Salon Sienna, Manchester, neglected to pay £1,760.48 to a worker;
- Mohammed Yamin of Minto Guest House, Edinburgh – neglected to pay £808.56 to a worker;
- Anne Henderson of Chambers Hairdressers, Middlesborough – neglected to pay £452.22 to a worker;
- Ruzi Ruzyyev, a car wash operator in Carmarthen – neglected to pay £225.38 to a worker.
The new regulations, which increase the financial penalties from £5,000 to £20,000, have come into play as of 7 March 2014. The government is also working on legislation that will apply the maximum penalty for each worker underpaid rather than the maximum applying to each employer. In serious cases, employers may also face criminal prosecution.
Rachel O’Connell, Solicitor and Director, Just Employment Ltd.