The Government is determined to clamp down on employers who fail to pay their workers the National Minimum Wage (NMW) and sees bad publicity as an effective deterrent against serious breaches of the law.
To this end, on 1 January 2011, the Department for Business, Innovation and Skills (BIS) introduced a scheme to name employers who flout NMW law.
Norman Lamb, Minister for Employment Relations before the latest Cabinet reshuffle, took the step of naming a Leicester based hair and beauty salon owner, Mrs Rita Patel, for failing to pay £3,361.22 in arrears of the NMW to a former worker after being required to do so by HM Revenue and Customs (HMRC). This has resulted in HMRC enforcing the debt through the courts.
Mrs Patel paid only £342.00 to a worker at the salon, Treena Professional Hair and Beauty, when she was legally entitled to be paid £3,703.22 for the work she had done.
The ‘naming and shaming’ scheme is just one of the tools at the Government’s disposal to tackle employers who fail to abide by the NMW law. HMRC also issue a press release when an employer loses an appeal against a Notice of Underpayment requiring them to pay arrears of wages. Where a worker has been paid less than the NMW, the employer must settle the arrears at current rates and faces a penalty of up to £5,000. For the most serious infringements, employers can be prosecuted.