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More than 200,000 workers who were paid less than the minimum wage have been identified following a record government clampdown.
Her Majesty’s Revenue and Customs (HMRC) achieved record enforcement results this year, identifying £15.6million of underpayments.
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, 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.
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 sectors are where non-compliance with National Minimum Wage is believed to be more widespread.
Penny Ciniewicz, HMRC Director General of Customer Compliance, 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.
“If anyone thinks they are not receiving at least the minimum wage, they can contact the Acas helpline on 0300 123 1100 in confidence or submit a query online through our complaints form.”
Low Pay Commission Chairman Bryan Sanderson said: “All workers are entitled to be paid at least the minimum wage, so it is good to see increased focus on enforcement bearing fruit and securing more arrears for more workers.
“Awareness of the minimum wage is vital for workers and employers alike, and strong enforcement is critical to its success.”
Funding for minimum wage enforcement has reached record levels, rising to £26.3 million in 2018/19 from £20 million in 2016/17.
For more information about your pay, or if you think you might be being underpaid, get advice and guidance at www.gov.uk/checkyourpay. Workers can also seek advice from workplace experts Acas.
Westminster Government introduces fees for employment tribunals
Bringing a claim or an appeal to the employment tribunal is currently free of charge with the full cost being met by the taxpayer, but the government has now introduced fees, claiming that by doing this people using employment tribunals will meet ‘a significant proportion’ of the £84m cost of running the system. Their aim, they say, is to reduce the taxpayer subsidy of these tribunals by transferring some of the cost to those who use the service, while protecting access to justice for all.
The Advisory, Conciliation and Arbitration Service (ACAS) – a taxpayer-funded service to help workers and businesses settle disputes without the need to go to a tribunal – will remain free, but if agreement cannot be reached at that stage and the claim is taken further significant costs will now be incurred.
Workers will have to pay £160 or £250 to lodge a claim and a charge of either £230 or £950 if their case goes ahead.
Minister Jonathan Djanogly said: “It’s not fair on the taxpayer to foot the entire £84m bill for people to escalate workplace disputes to a tribunal. We want people, where they can, to pay a fair contribution for the system they are using, which will encourage them to look for alternatives.
“It is in everyone’s interest to avoid drawn out disputes which emotionally damage workers and financially damage businesses. That’s why we are encouraging quicker, simpler and cheaper alternatives like mediation.”
Critics of the charges argue that the new charges will dissuade many employees from making legitimate claims about workplace discrimination and there is concern that, once again, it is the poorest and most vulnerable that will suffer.
TUC General Secretary Brendan Barber said: “It is vital that working people have fair access to justice, but introducing fees for tribunals will deter many – particularly those on low wages – from taking valid claims to court. Many of the UK’s most vulnerable workers will simply be priced out of justice.
“The government’s remission scheme to protect low-paid employees is woefully inadequate, and workers will be more likely to be mistreated at work as rogue bosses will be able to flout the law without fear of sanction.”
Responding to a consultation on the controversial proposals, Citizens Advice Scotland’s Kevin Dryburgh said: “Employment tribunals are an essential service for all workers and employers in the UK. It is not just successful claimants who benefit – all employers and workers benefit from a service that protects workers, discourages rogue and exploitative employers, and ensures a level playing field for good employers.
“Far from being a costly burden on employers and tax payers, employment tribunals play a key role for all those in work. Placing barriers to accessing Employment Tribunals will affect the effectiveness of the service in providing this role.”
Trade union UNISON is fighting the fees and has been given permission to seek a judicial review. The hearing will take place in October.
