More businesses named and shamed

24 March 2015

The Department for Business, Innovation & Skills (BIS) has “named and shamed” 48 employers failing to comply with National Minimum Wage (NMW) law.

Those businesses named include childcare nurseries, restaurants and a pizza hut franchise.

The 48 businesses owe almost £162,000 between them.

They are added to the names already published. Since the naming and shaming regime came into force in October 2013, the names of more than 200 employers, owing more than £630,000 in arreas, have been released.

The business minister Jo Swinson said: “There’s no excuse for companies that don’t pay staff the wages they’re entitled to – whether by wilfully breaking the law, or making irresponsible mistakes.

“The government is protecting workers by cracking down on employers who ignore minimum wage rules.”

While a ‘tougher approach’ to NMW non-payment is obviously welcome, the 200 named are only the tip of the iceberg and are a smokescreen covering the fact that from 2009 to 2014, there has been a 60 per cent reduction in businesses inspected by NMW enforcement officers at HMRC Under the coalition government only two prosecutions have been brought against criminal employers.

Higher fines, more prosecutions and more enforcement officers are needed to properly combat those who underpay, and deter others from doing so.

A report by Newham council and the GMB union found that £533m is lost to workers across the country because firms paid below the statutory minimum wage.

In Newham, it is estimated that a fifth of residents are paid below the NMW. The council is calling for local authorities to be given power to tackle businesses.

Mayor of Newham, Sir Robin Wales, said: “This report clearly demonstrates that central government has been woefully inadequate at protecting workers from exploitative businesses who, in the majority of cases, are wilfully breaking the law.

“Local authorities have the interests of their residents at heart, and are best placed to identify rogue businesses. We’re already aware of companies that flout licensing, planning, trading standards and waste rules and are able to take action. With additional powers to tackle underpayment of [national minimum wage], councils could make a substantial difference to residents’ lives.”

Paul Kenny, General Secretary of GMB said: “The national minimum wage is one of the most important workplace rights and more needs to be done to ensure all workers receive the pay to which they are entitled. Centralised enforcement is weak and currently fails to protect the lowest paid and most vulnerable. That is why Newham’s proposals for local authorities to be able to investigate and in turn prosecute employers who exploit their workers must be implemented immediately.”