Employment Law | HMRC Flexes Minimum Wage Muscle

HM Revenue & Customs (HMRC) has investigated hundreds of employers accused of breaching minimum wage rules, with the result that tens of thousands of workers have received hundreds of pounds in back pay.

The department said that 708 employers had been fined with charges of up to £5,000, after it reviewed 1,693 complaints in 2012-13 and revealed that the average back pay to workers was £300.

The employers could not be named but are believed to include some of the UK’s largest employers.  However, the department highlighted individual cases to outline the breaches.

One was a national retailer that required its employees to be in work both before and after opening hours but refused to pay them for that time.  The retailer was ordered to pay arrears of more than £193,000 to nearly 3,500 employees.

Another case involved a multi-outlet retailer, which was ordered to repay almost £170,000 to more than 6,000 workers for forcing employees to buy specific items of clothing from its stores.

In addition, a major fashion chain had to pay its 90 unpaid interns almost £60,000, as under the national minimum wage, it is unlawful for organisations not to pay anyone who could be classified as a worker, although according to the Department for Business, Innovation and Skills (BIS), there is “no definition of an internship/work experience in minimum wage legislation”.

However, the BIS said that the arrangement a person had with an employer might mean they were a “worker”, therefore entitling them to the minimum wage, even if they were described as an “intern”.

The department added that the Government’s checklist of what “generally” describes a worker includes the promise of future work and having to turn up for work, even if the person does not want to.

HMRC revealed that calls to its Pay and Work Rights Helpline led to the investigations into employers.  Currently calls from interns working for nothing or “expenses only” are being fast-tracked for investigation.

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Mackrell Turner Garrett Solicitors in London