Employers fined an unprecedented £14.5m for not meeting minimum wage legislation
Record £15.6 million underpayment identified for workers on the minimum wage
2nd October 2018
More than 200,000 workers who were paid less than the minimum wage have been identified following a record government clampdown.
- Record £15.6 million of underpayment identified for more than 200,000 workers
- Employers fined unprecedented £14 million for not meeting legal obligations
- More than 600 employers named in 2017/18 as part of ‘naming’ rounds
- Ramped up efforts by HMRC to crackdown on underpayment and boost compliance
The number of workers identified as underpaid was double that in 2016/17 and the highest number since the National Minimum Wage came into force.
In every case, the government instructs employers to repay their workers and enforces the return of the missing cash.
The rise in cases follows increased efforts by HMRC to promote compliance and improve employer awareness of the minimum wage.
Business Minister Kelly Tolhurst, recently said:
"We are dedicated to stopping underpayment of the minimum wage. Employers must recognise their responsibilities and pay their workers the money they are entitled to.
The UK’s lowest paid workers have had the fastest wage growth in 20 years thanks to the National Living Wage and today’s figures serve as a reminder to all employers to check they are getting their workers’ pay right."
Over the past year, 56 employers took advantage of a HMRC pilot scheme where employers were encouraged to come forward outside of an investigation. This resulted in nearly £250,000 in arrears being declared for just under 700 workers.
The year also set a new record for penalties issued by the government, with £14 million in fines issued to employers. More than 600 employers who were found to have underpaid their workers the minimum wage were named in 2017/18. This is the largest number in any single year since the scheme began in 2014.
Specific sectors targeted
This year, the social care, retail, commercial warehousing and gig economy sectors have been prioritised by HMRC for enforcement of the minimum wage. This is alongside employment agencies, apprentices and migrant workers. These are the sectors where non-compliance is believed to be more widespread.
The full list of companies that have been identified and fined shows that both large and small firms are being investigated. You can find the full list here
Penalties and re-payment of arrears
Funding for minimum wage enforcement has reached record levels, rising to £26.3 million in 2018/19 from £20 million in 2016/17, increasing HMRC's resources in tackling this issue. Employers who pay workers less than the minimum wage have to pay back arrears of wages to the worker at current minimum wage rates and face financial penalties of up to 200% of arrears, capped at £20,000 per worker.
Penny Ciniewicz, HMRC Director General of Customer Compliance, recently said:
"HMRC is committed to ensuring that workers receive the wages they are legally entitled to, irrespective of their employer’s size or business sector, and today’s figures highlight our success over the last year."
National Living and Minimum Wage rates as at financial year 2018/19:
25 and over - £7.83
21 to 24 - £7.38
18 to 20 - £5.90
Under 18 - £4.20
Apprentice - £3.70