Last week, the UK Government released a list of 202 UK companies that have failed to pay staff minimum wage. Within the list, these companies altogether have failed to pay a total of £5 million, which is a violation of the national minimum wage (NMW) law.
The list comprised companies of various sizes and sectors, from high street brands to small companies as well as sole traders. They are now subject to reimburse over 63,000 workers. Additionally, the government has also subjected them to face penalties of nearly £7 million.
Ways that Workers Have Been Underpaid
The investigation by the HMRC found that these breaches were done in a few ways. Among them, the most common ones were through deduction of pay from workers’ wages (39%) and failure to pay correctly according to working times (39%). Other than that, 21% of companies failed to pay NMW due to paying the incorrect apprenticeship rate.
The government also noted that these underpayments may not be intentional in all circumstances. However, they deemed that there is no excuse to underpay workers.
Kevin Hollinrake, Minister for Enterprise, Markets and Small Businesses stated, “Paying the legal minimum wage is non-negotiable and all businesses, whatever their size, should know better than to short-change hard-working staff.
Most businesses do the right thing and look after their employees, but we’re sending a clear message to the minority who ignore the law: pay your staff properly or you’ll face the consequences.”
This move from the government to name the companies is an effort to shine a light on the issue that has been affecting thousands of workers across the country. By publicising this information, it is hoped that companies will be aware and ensure they are paying the correct wages.
National Minimum Wage
The National Minimum Wage (NMW) is the minimum pay per hour that workers are entitled to. Recently, the government instated an increase in the rates which can be found here.
As of April 1st, an upward adjustment has been implemented for the National Minimum Wage (NMW) and National Living Wage (NLW) rates. This significant increase aims to alleviate the adverse impact of the escalating cost of living on individuals with low incomes.
In October 2022, the Low Pay Commission (LPC) extended its recommendations to the government, advocating for an increase in the NMW and NLW rates. Their comprehensive report not only analysed the potential economic implications of the new rates but also provided projections regarding future national earnings.
Despite the increase, it is important to note that both the NMW and NLW still fall short of the real Living Wage. Moreover, the pace at which wages are rising remains slower than the overall increase in living expenses across the United Kingdom.
Companies underpaying workers below the NMW has adverse effects on their lives, especially those earning the minimum rate. Continued breaches are not only illegal but also detrimental to the well-being and livelihood of low-earner individuals. The government recommends that workers check their wages to ensure they are in line with current laws using guides that can be found here.