National minimum wage: name and shame

12 Sep 2012

In January of last year, the UK Department for Business, Innovation and Skills (BIS) introduced a scheme whereby employers who fail to pay employees the national minimum wage can be named.  The reasoning behind the scheme was that the bad publicity might achieve what the risk of getting caught could not and impel employers to pay the national minimum wage ("NMW").

You would be forgiven for having forgotten about the BIS scheme as nothing much has been heard of it since its introduction.  However, the Minister for Employment Relations, Norman Lamb, has now released the very first naming of a minimum wage violator: Mrs Rita Patel, who failed to pay over £3,000 in NMW.

In order to be named, there must be evidence that the employer:

– knowingly or deliberately failed to comply with its NMW obligations; or
– failed to comply with previously received advice from HMRC about the steps they need to take to ensure future compliance with NMW; or
– failed to take adequate steps to keep or preserve NMW records; or
– delayed or obstructed a NMW compliance officer in the performance of their duties; or
– refused or neglected to answer a NMW compliance officer's questions; or
– refused or neglected to provide information or produce documents to a NMW compliance officer; or
– refused or neglected to pay NMW arrears, following HMRC intervention (and which has resulted in HMRC taking action against the employer to ensure payment).

Our view:

We are of course confident that all of our subscribers pay the national minimum wage; however, it is worth remembering that an employers' obligations go beyond just calculating salaries: properly recording and keeping records for NMW purposes is an important obligation for employers to meet.