A substance abuse treatment organisation has accused the Government of taking a “heavy handed and ill advised” approach to naming and shaming companies it deems not to have paid the national minimum wage.
The chief executive of Sunderland-based Counted4 expressed his frustration at the community interest company being named on a list of 37 companies which had failed to pay hundreds of pounds in wages.
John Devitt said the issue related to a senior member of staff on a salary well above the minimum wage who left the organisation before the end of a training period.
The company recouped training expenses from the employee and in doing so fell foul of the law, of which Mr Devitt said they were unaware.
Counted4 was ordered by HMRC to return £930.73 in arrears to the worker in question and said it immediately paid in full.
The organisation subsequently found itself published on a list of companies who have failed to pay the National Minimum Wage. The list has been widely published.
Mr Devitt told The Journal: “This is a classic heavy handed and ill-advised approach to this issue. It just doesn’t help anyone and is detrimental to the employee and the organisation.
“The issue is particularly upsetting because as an organisation we stick up for the underdog.”
The Government list was compiled following worker complaints to the free and confidential Pay and Work Rights Helpline. The grievances were said to have been “thoroughly” investigated by HM Revenue & Customs (HMRC).
Businesses named in the recent list have been handed financial penalties of more than £51,000 as workers were owed £177,000 in arrears.
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.
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.”
It was announced in the Chancellor’s Autumn Statement that HMRC’s National Minimum Wage enforcement budget would be increased by £3m in 2015/16 – taking the total to £12.2m.
The Government said the extra money will go towards increasing the number of HMRC compliance officers to identifying firms paying below the National Minimum Wage.
Counted4 offers clinical and community services to people affected by alcohol and drugs misuse and said its average salary is around £22,000.