Enforcement of the national minimum wage must be continuously improved in order to combat those employers who are actively trying to find ways not to pay their workers properly, according to findings in a new TUC report.
The minimum wage, (currently £6.50 for over 21 year-olds) introduced in 1999, enjoys support from business leaders and trade unions alike and is a matter of political consensus. But the report estimates that at least 250,000 workers are not being paid the legal minimum wage.
Enforcing the National Minimum Wage – Keeping up the Pressure says that whilst most employers are happy to pay up, a minority have developed a wide range of scams, including under-recording hours, bogus self-employment, misusing interns and volunteers, charging for uniforms, not paying for travel between work sites during the working day, clocking workers off when there are no customers in the store or cafe, and employers vanishing to avoid minimum wage fines - only to reappear under another trading name.
Apprentices are particularly likely to be underpaid, with a recent government survey suggesting that 120,000 are paid less than the relevant minimum wage rate.
Successive governments have already made some worthwhile improvements to minimum wage enforcement. But new ways of cheating or avoiding the minimum wage have emerged on a regular basis, so constant vigilance is needed.
The TUC plan outlines a 10-point programme of continuous improvement during the next parliament:
Restore the budget for raising awareness about the minimum wage to £1m.
Hire 100 more HM Revenue and Customs (HMRC) enforcement officers
Better official guidance on the minimum wage so that employers know their responsibilities.
Create legal gateways so that HMRC can share information about enforcement with local authorities and the transport regulatory authorities
Name and shame all non-payers.
Government to guarantee arrears if employer goes bankrupt or simply vanishes.
Adopt a prosecution strategy targeted towards the worst offenders and increase maximum fine from £5,000 to £75,000.
More targeted enforcement for high-risk sectors.
Make government funding for training apprentices dependent on employers paying the minimum wage, and create a duty for training providers to check that the minimum wage is paid.
Promote collective bargaining so that trade unions can deal with more minimum wage problems themselves.
There should be a broad consensus between political parties, good employers and trade unions that the minimum wage must always be enforced effectively. We urge everyone to support the TUC’s plan for ensuring continuous improvement to the minimum wage system.
Beth Farhat, Regional Secretary Northern TUC