Foul! Falkirk, Motherwell and Morton football clubs named and shamed
The Department for Business, Energy and Industrial Strategy (BEIS) today named 260 employers for failing to pay 16,000 workers at least minimum wage rates. Government investigators identified £1.7 million in back pay for some of the UK’s lowest paid workers and fined employers £1.3 million for underpayment. Continue reading 260 employers named and shamed
Have your say on minimum wage rates
The Government is making changes to the UK minimum wage rates and has asked the Low Pay Commission (LPC) to report and gather evidence on these new arrangements.
It has asked the LPC to report on the future level of the existing UK minimum wage rates, by February 2016. It has also asked the LPC to report on the future level of the new National Living Wage (NLW), which will be introduced in April 2016 and applies to workers aged 25 and over.
As part of evidence gathering a public consultation has been launched including a short survey which runs until 25 September 2015.
The government has announced that the National Minimum Wage will increase by 3% to a new rate of £6.70 per hour, effective from October – the largest real-terms increase in the National Minimum Wage since 2008. Over 1.4 million of Britain’s lowest-paid workers are set to benefit but critics say the increase doesn’t go far enough.
The Prime Minister and the Deputy Prime Minister have also announced that the National Minimum Wage for apprentices will increase by 57p an hour to £3.30. This is the largest ever increase in the National Minimum Wage for apprentices and will halve the gap with the National Minimum Wage rate for 16 to 17 year olds, which will be £3.87 an hour from October 2015. The government will also launch a consultation with businesses on the future of the National Minimum Wage rate for apprentices.
The government is also putting employers in control of the funding for apprenticeships by introducing a new digital apprenticeship voucher.
Apprenticeship vouchers will further simplify things for employers and give them the purchasing power over the government contribution to apprenticeship funding. The employer would register their details on a system being developed by the Skills Funding Agency including their type of business, the details of the apprentice and the apprenticeship standard being signed up to.
The discounted rate, which could be up to 100% for 16 to 18 year olds, at which employers can purchase training would be calculated and the employer would be able to pass on the voucher code to the provider that is delivering the training for their apprentice. The provider would then reclaim the value of the voucher from the Skills Funding Agency.
Prime Minister David Cameron said: “At the heart of our long-term economic plan for Britain is a simple idea – that those who put in, should get out; that hard work is really rewarded; that the benefits of recovery are truly national.
“That’s what today’s announcement is all about – saying to hardworking taxpayers: this is a government that is on your side. It will mean more financial security for Britain’s families; and a better future for our country.”
Deputy Prime Minister Nick Clegg said: This is just one of the many ways in which we’ve created a fairer society whilst building a stronger economy. If you work hard, this government is behind you all the way. Whether you’re on low pay or starting your dream career through an apprenticeship, you will get more support to help you go further and faster.”
However some feel the help to Britain’s lowest paid doesn’t go far enough.
TUC General Secretary Frances O’Grady said minimum wage workers will be hit by the Chancellor’s cuts. “For the low paid to get a fair share of the recovery, this was a year in which we could have had a much bolder increase in the minimum wage,” he said.
“With one in five workers getting less than a living wage, this is nowhere near enough to end in-work poverty. Britain’s minimum wage workers should be very fearful of the billions of pounds of cuts to government help for the low paid that the Chancellor is planning if re-elected.
“Apprentices will welcome the increase to their minimum wage, which will reduce the shortfall in their minimum pay relative to 16 and 17 year-old employees. But there really shouldn’t be a gap at all. The TUC will continue to call on the Low Pay Commission to recommend a future increase that will match the apprentice rate to that for 16 and 17 year-olds.”
Labour’s shadow business secretary Chuka Umunna said: “This 20p rise falls far short of the £7 minimum wage which George Osborne promised over a year ago. Ministers have misled working families who have been left worse off. Under David Cameron we’ve seen the value of the minimum wage eroded – we need a recovery for working people.”
Labour has promised the minimum wage would rise rise to £8 an hour over the course of the next parliament if it wins in May.
This latest announcement – coming on the back of positive news about pension annuities yesterday and before a likely rise in personal tax allowances is announced tomorrow – makes one thing pretty clear: the economy will be the government’s chosen battleground in May’s general election.
The Chancellor’s statement this week may not quite be a giveaway budget – but it certainly won’t be a takeaway one either. And if the economy really is the number one priority when voters go to the polls in May, the government is giving itself a fighting chance of re-election. ‘Not a political budget?’ – we’ll see!
The National Minimum Wage rates from 1 October 2015, as recommended by the Low Pay Commission. (LPC) will be:
‘The Low Pay Commission should do what it says on the tin – and fight for the low paid’ – GMB General Secretary Paul Kenny
The Low Pay Commission LPC) has recommended to the Government that the adult rate of the National Minimum Wage should rise by 3 per cent to £6.70 from October – but trade union leaders and anti-poverty campaigners argue the increase simply isn’t enough
The LPC’s aim is to advise on a rate that protects as many low-paid workers as possible without damaging jobs or the economy. The Commission says it has carefully weighed the risk of doing too little to raise the earnings of the lowest paid against the risk of recommending more than business and the economy can afford.
With inflation now forecast at 0.5 per cent, would, if accepted by the Government:
Commenting on the recommendation, David Norgrove, Chair of the LPC said: “Last year we were pleased to recommend the first real terms increase in the value of the minimum wage since the recession. We argued that the minimum wage had proved its worth over the course of the slowdown, increasing relative to earnings generally and protecting the low paid during the downturn in a way not seen before albeit, as with wages for all other workers, its real value fell.
“Sharp increases in the minimum wage would put jobs at risk – not least bearing in mind pressure on low-paying sectors and small firms. We do believe however that the continued recovery, and in particular the impressive growth in employment of the low paid, should this year allow a further increase in the real and relative value of the minimum wage.
“An increase of 3 per cent to £6.70 is a larger real terms increase than last year and, on the basis of the most recent Bank of England inflation forecast, should restore three-quarters of the fall in the real value of the NMW relative to its peak in 2007.
“We judge that the improved economic and labour market conditions mean once again that employers will be able to respond in a way that supports employment. However, our recommendation this year is predicated on a forecast which foresees lower costs for business in fuel and energy, a strong economic performance, significant recovery in earnings across the economy and rising productivity. If these expectations are not borne out over the year we will take this into account when considering next year’s recommendation”.
As well as its recommendation for the adult rate, the Low Pay Commission has also recommended:
However some argue that the increase doesn’t go far enough. The GMB trade union has called on Vince Cable to revise the LPC’s proposal of £6.70 National Minimum Wage from October to make up ground lost during the recession. The GMB says the rate should be at least £6.99 per hour.
Paul Kenny, GMB General Secretary, said “This is a missed opportunity by the Low Pay Commission to uprate the national minimum wage to the real term rate that it was before the recession hit in 2007. Vince Cable should revise the proposal.
“With the economic recovery under way there is no justification for the national minimum wage not going back to where it was in real terms before the recession.
“The Low Pay Commission should have recommended a rate of at least £6.99 per hour from October 2015 to make up the ground lost since the rate was fixed at £5.65 from 1st October 2006 before the recession.
“The Low Pay Commission should do what it says on the tin – and fight for the low paid.
“There has to be a concerted effort to make work pay. If this was done, staff would not need their meagre wages to be topped up by taxpayers with family tax credits and housing benefits so as to make ends meet.
“GMB members tell us that in their experience at least £10 an hour and a full working week is needed to have a decent life free from benefits and tax credits. Less than £10 an hour means just existing not living. It means a life of isolation, unable to socialise. It means a life of constant anxiety over paying bills and of borrowing from friends, family and pay day loan sharks just to make ends meet.”
The Poverty Alliance is spearheading the campaign for a living wage in Scotland.
“The Scottish Living Wage Campaign believes that a job should help you out of poverty, not keep you there.
“The National Minimum Wage is not enough for individuals in Scotland to access the essentials of everyday life. £6.50 per hour will just never be enough to cover the day to day basics, nevermind to save some money or plan for emergencies.
“Hundreds of thousands of workers are being paid wages that basically equate to poverty pay. This is simply not right.”
GMB trade union calls for guilty directors to be barred
A further 37 employers who failed to pay their workers the National Minimum Wage – including one in Edinburgh – have been named today by Business Minister Jo Swinson.
Between them they owe workers a total of over £177,000 in arrears and have been charged financial penalties totalling over £51,000.
The government has already named 55 employers since the new naming regime came into force in October 2013. They had total arrears of over £139,000 and total penalties of over £60,000. One of the previous offenders was private school Cargilfield in Cramond, who were fined last June for underpaying a member of staff by over £3700.
HM Revenue and Customs’ (HMRC) National Minimum Wage enforcement budget will be increased by a further £3 million in financial year 2015 to 2016 – taking the total to £12.2 million. The extra money will go towards increasing the number of HMRC compliance officers to identify businesses that exploit their workers by paying them below the National Minimum Wage.
Business Minister Jo Swinson said: “Paying less than the minimum wage is illegal, immoral and completely unacceptable. If employers break this law they need to know that we will take tough action by naming, shaming and fining them as well as helping workers recover the hundreds of thousands of pounds in pay owed to them.
“We are also looking at what more we can do to make sure workers are paid fairly in the first place. As well as being publicly named and shamed, employers that fail to pay their workers the National Minimum Wage face penalties of up to £20,000. We are legislating through the Small Business, Enterprise and Employment Bill so that this penalty can be applied to each underpaid worker rather than per employer.”
Employers who are unsure of National Minimum Wage rules can also get free advice via the Pay and Work Rights Helpline on 0800 917 2368.
The 37 employers are:
The 37 cases named today were thoroughly investigated by HM Revenue and Customs after workers made complaints to the free and confidential Pay and Work Rights Helpline.
The scheme was revised in October 2013 to make it simpler to name and shame employers that do not comply with minimum wage rules, but the GMB trade union says the enforcement rules should also be changed so that trade unions can make complaints to HMRC on behalf of members.
Commenting on the latest announcement Martin Smith, GMB National Organizer, said: “Far too few wage-dodging employers not paying the national minimum wage have been bought to justice. Government needs to make a real commitment to making work pay by more aggressively seeking out offenders to prosecute them. The enforcement rules should also be changed so that trade unions can make complaints to HMRC on behalf of members.
“As part of the public disgracing for the firms named GMB is calling for the directors of these companies to be placed on a “wage offenders register” at Companies House and be deemed an unfit person to hold any further directorships.
“There needs to be a recognition that a national minimum wage of £6.50 is near impossible to live on as it is without relying on state benefits. There are bucket loads of evidence that an uplift of at least 50p per hour would help the low paid and start to stimulate the economy and that all the big firms including the retailers can afford it.
“There is no justification for the national minimum wage not keeping up with inflation. The Low Pay Commission should recommend a rate of at least £7 per hour from October 2014 to make up the ground lost since 2006.
“It is time for the Low Pay Commission to do what it says on the tin – fight for the low paid.”
