More than 26,000 workers denied the National Minimum Wage by their employers have received a £4 million windfall after action by HM Revenue and Customs (HMRC).
In 2012-13, HMRC investigated 1,693 complaints against employers for allegedly breaching minimum wage rules. This resulted in 708 employers receiving automatic penalty charges of up to £5,000 and 26,519 employees receiving an average of £300 in back pay, topping up wages that had previously been below the legal minimum rate.
Employment Minister Jo Swinson said:
“Paying less than the minimum wage is totally unacceptable. Whenever we find examples of businesses breaking the law we will crack down on them.
“Supporting fairness in the workplace is one of our key priorities and the National Minimum Wage is one way of making sure this happens. It supports as many workers as possible without damaging their employment prospects, which is why effectively enforcing the minimum wage is critically important in making sure it stays a success.
“The figures from last year show that HMRC can really help people who have been underpaid to claim back the money they are owed.”
Cases where HMRC has taken action against employers in the past year:
· A major fashion chain was ordered to pay its 90 unpaid interns almost £60,000.
· A multi-outlet retailer, which required employees to purchase specific items of clothing from its range, was ordered to repay almost £170,000 for more than 6,000 workers.
· A national retailer, which required its employees to attend work before and after opening hours without pay, was ordered to pay arrears of wages of more than £193,000 for nearly 3,500 workers.
· A recruitment agency, requiring its workers to attend training at a client’s business without pay, was ordered to pay £28,000 for 300 workers.
Michelle Wyer, Assistant Director of HMRC’s National Minimum Wage team, said:
“Paying the National Minimum Wage is not a choice – it’s the law. HMRC enforces the rules, protecting workers from rogue employers, ensuring they get at least the wage to which they are legally entitled.
“Where an employer ignores these rules, we will take steps to ensure arrears are paid out in full and the employer fined. In the most serious cases, criminal prosecution can follow.”
The vast majority of National Minimum Wage abuse cases are dealt with by HMRC using civil penalty powers, as this route is usually the most appropriate and provides the most cost-effective resolution for taxpayers. However, in more severe cases HMRC will take criminal action and seek a prosecution.
Anyone who believes they are not being paid the National Minimum Wage can call the Pay and Work Rights Helpline on 0800 917 2368. Calls to the helpline from interns, who are working for nothing or for “expenses only”, are being fast-tracked to HMRC enforcement officers for investigation.
In 2012-13,17,775 people called the Pay and Work Rights Helpline for advice or to report an illegal wage, leading to HMRC opening 1,408enquiries into employers.