Tuesday, 15 October 2013

Enforcing national minimum wage law

The revised scheme to name employers who break national minimum wage law is now in operation
Employers who fail to pay the national minimum wage (NMW) will be publicly named and shamed under revamped plans to make it easier to clamp down on rogue businesses.

The new rules are part of government efforts to toughen up enforcement of the NMW and increase compliance. By naming employers it is hoped that bad publicity will be an additional deterrent to employers who would otherwise be tempted not to pay the NMW. This is on top of financial penalties which employers already face if they fail to pay NMW.

The revised NMW naming scheme, which came into effect on 01 October 2013, strips back restrictions, making it simpler for government to name more employers who break the law.

Under the original scheme, employers had to meet one of seven criteria before they could be named. The minimum amount of NMW owed to workers had to be at least £2000 and the average per worker at least £500 before an employer could be referred to the Department for Business, Innovation & Skills (BIS) from HM Revenue & Customs (HMRC) for naming.

The revised scheme removes these restrictions so that any employer who breaks national minimum wage law can be named.

In 2012 to 2013 HMRC identified 736 employers who had failed to pay the national minimum wage leading to the recovery of £3.9 million in unpaid wages for over 26,500 workers.

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Ardean : Business Planning

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