Naming and shaming the minimum wage offenders

22 October 2021

The government recently took the step of naming and shaming almost 200 UK companies that had broken National Minimum Wage (NMW) laws. Following investigations by HMRC, the named firms had to repay £2.1 million to over 34,000 workers and were fined an additional £3.2 million.

Breaching NMW laws

Last year the number of workers HMRC helped to reclaim lost earnings rose to over 155,000 across the UK. HMRC recovered more than £16 million in pay that was due to them and also issued more than £14 million in penalties. Although not all NMW underpayments are intentional, it has always been the responsibility of all employers to abide by the law.

The employers named by the government fell foul of NMW laws:

47% wrongly deducted pay from workers’ wages, including for uniforms and expenses
30% failed to pay workers for all the time they had worked, such as when they worked overtime
19% paid the incorrect apprenticeship rate.

Poor excuses

In addition to naming and shaming offenders, HMRC revealed some of the most ‘absurd’ excuses given by employers for not paying their employees the NMW.

HMRC’s top five ‘ridiculous’ excuses for flouting the law are:

‘She does not deserve the NMW because she only makes the tea and sweeps the floors.’
‘The employee was not a good worker, so I did not think they deserved to be paid the NMW.’
‘My accountant and I speak a different language – he does not understand me, and that is why he does not pay my workers the correct wages.’
‘My employee is still learning so they are not entitled to the NMW.’
‘It is part of UK culture not to pay young workers for the first three months as they have to prove their ‘worth’ first.’

The National Living Wage and the NMW

Anybody working aged 25 or over and not in the first year of an apprenticeship is legally entitled to the National Living Wage (NLW).

Despite its name, this rate is essentially a NMW for the over 24s. The government is committed to increasing this every year.

The NLW rate changes every April, while the NMW rates have traditionally been revised in October. However, since April 2017 the NMW and NLW cycles have been aligned so that both rates are amended in April each year. Employers will need to make sure they are paying their staff correctly as the NLW will be enforced as strongly as the NMW.

The table below shows the NMW and NLW rates applying from 1 April 2021: