Enforcement method is part of the governmental strategy against minimum wage underpayers.
In July 2018, the Department for Business, Energy and Industrial Strategy (BEIS) released their latest public list containing all organisations who had been identified as paying their staff under the national minimum wage (NMW) or national living wage (NLW) within the last quarter. That list contained 239 business names, postcodes, sector, the number of workers identified as underpaid and the sum of underpayments. In total, the value of pay, which had failed to be provided to 22,400 workers, was £1.44 million.
'Naming and shaming' through the government has been an important part of the enforcement regime against organisations who fail to give their staff the correct pay. Alongside a wage investigation by HM Revenue & Customs (HMRC) which can result in a potential fine of up to 200 per cent of the amount of underpayments, capped at £20,000 per worker, ‘naming and shaming’ was seen as being very effective in causing public and reputational damage to those who had been named. Since July 2018 however, the BEIS has not released another list.
Towards the later stages of 2018, it was revealed that the government was carrying out a review of the ‘naming and shaming’ regime. Business Ministers have now confirmed that naming and shaming will not be recommenced until this review is completed, with Kelly Tolhurst MP disclosing that there is “no set completion date” for the review.
In April 2018, as part of their review into annual statistics which reported record levels of underpayments, the Low Pay Commission (LPC) recommended regular naming and shaming rounds were reintroduced. Although the regime has not been scrapped completely, a pause in the scheme whilst the review is conducted could lead towards underpaying organisations slipping through the net of awareness. Thereby, failing to provide an effective deterrent towards acting illegally whilst paying staff.
Even though the ‘naming and shaming’ regime has been paused, current enforcement and investigations by HMRC will continue during this period. Workers remain able to raise a wage complaint proactively with HMRC, and can do so online and even anonymously. This lowers the possibility that wage infractions continue to go unnoticed and unaddressed, with HMRC committing to respond to all online complaint forms within five days of submission. The high penalty fines remain in force and any organisation who makes a wage underpayment, whether intentional or by accident, will also have to repay all money owed. Whilst ‘naming and shaming’ is under review, organisations may wish to take this opportunity to review their own pay practices to ensure these are lawful.