HMRC recovers over £15m in minimum wage underpayments

The Department for Business, Enterprise and Industrial Strategy has released a report containing details of the government’s enforcement of minimum wage underpayments.  It reveals that the arrears identified by the HMRC in 2017/18 was the highest amount of money recovered for the highest number of workers in any year since the National Minimum Wage (NMW) was introduced, with 200,000 workers identified as being underpaid a total of £15.6 million.

Employers who are found not to comply with the NMW are required to repay any arrears to their staff, as well as a fine equating to up to 200 per cent of the underpayment, capped at £20,000 per worker. As a result, in 2017/18, the HMRC has issued businesses with fines totalling £14 million; which is three times higher than the penalties issued in 2016/17. Whilst the HMRC only carried out one criminal prosecution during the year, more than 600 companies were ‘named and shamed’ by the government during this period, which, for some, caused significant reputational damage.

The government is continuing in its efforts to raise awareness of minimum wage laws and have undertaken various measures to combat the issue of underpayment, including sending 1.6 million text messages to workers considered to be at risk; launching a new website; and sending emails to employers. The HMRC has also undertaken targeted enforcement efforts on sectors they consider to be most at risk, including social care, retail warehousing and ‘gig economy’ employers.

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