Employment Law | Employer ‘Named And Shamed’ Over National Minimum Wage Breach

With the national minimum wage (NMW) set to rise on Monday to £6.19 for workers aged 21 and over and to £2.65 an hour for apprentices, news was announced earlier this month that the first employer has been ‘named and shamed’ for paying too little.

Following an investigation by HM Revenue & Customs (HMRC), an owner of a health and beauty salon in the Midlands, was pursued in court by the department for grossly underpaying a member of staff over a period of four and half months.

It has been revealed that the employer only paid the unnamed worker only £342 for the period when, legally, they should have been paid £3,703.22 for hours worked during that time.

Despite the ‘naming and shaming’ scheme being brought into effect by the Department for Business, Innovation and Skills (BIS) in 2011, this is the first case where someone has actually been named, but the Government says that it is now committed to deterring employers who are tempted not to pay the NMW but who recognise that bad publicity would be bad for business.

Until now HMRC has just issued a press release when an employer has unsuccessfully appealed against a notice of underpayment requiring them to pay arrears of wages.

To be named publicly, an employer would have to be proved to have knowingly or deliberately failed to comply with their NMW obligations, refused or neglected to pay arrears owed to an employee following HMRC intervention or delayed or obstructed an NWM compliance officer in the performance of their duties.

The penalties incurred by employers include being forced to pay arrears to the employee at current NMW rates, pay a fine and, in the most serious cases, they may be prosecuted.

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Mackrell Turner Garrett Solicitors in London