Government promises crackdown on firms which flout minimum wage laws

Economy & Politics | Employment & Skills | Latest News | National

Businesses which fail to pay their workers the National Minimum Wage or National Living Wage will continue to face public shaming at the hands of the Government.

The naming scheme has undergone a detailed review, but its conclusion is that current legislation will stand – and businesses will be publicly named if they pay beneath the minimum.

The changes, which will see naming rounds occur more often, are designed to increase the effectiveness of the measure as a deterrent.

Business Minister Kelly Tolhurst said: “Anyone who is entitled to the minimum wage should receive it – no ifs, no buts – and we’re cracking down on companies that underpay their workers.”

Changes will also mean the threshold for naming non-compliant firms will increase meaning that firms which owe arrears of more than £500 in minimum wage payments to their workforces will now be named. The threshold was previously £100.

This new approach will mean some businesses falling foul of the rules by minimal sums will not be named, provided they correct any errors – though they can still be fined if they do not.

From April, the minimum wage for over-25s in the UK will rise by 51p an hour to £8.72.

It will come into force alongside a raft of other changes to pay regulations – prompting the government to announce new measures to support firms to become compliant.

These measures include new online guidance, visits to new small businesses, and a dedicated helpline.

Tolhurst added: “We also want to make it as easy as possible for employers, especially small businesses and those trying to do right by their staff, to comply with the NMW rules, which is why we’re reforming regulations.”

The changes have been positively received by Matthew Taylor, Director of Labour Market Enforcement.

He said: “I welcome today’s announcement by the Government and believe employers will benefit from the greater clarity these revisions bring to the minimum wage rules for salaried workers.

“Particularly welcome is the news of the reintroduction of the NMW Naming Scheme, that both recognises the sharper focus advocated by my predecessor and follows a stronger compliance and education approach to help employers get it right.”

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