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No Underpayment too Small to Avoid National Minimum Wage Investigation

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This article has been submitted by Croner

In their latest ‘name and shame’ campaign, the government have listed 230 employers who have failed to pay workers the National Minimum Wage. In total, 13,000 employees are set to receive compensation of a record £2 million for their loss of pay.

Addressing an all-too-common misconception, it has been revealed that 115 employers have been ‘named and shamed’ for failing to pay just one worker the minimum wage, highlighting the extent of the government’s investigations, and reiterating that any underpayment, regardless of its size, can attract significant attention.

In a similar light, 202 employers have been named for failing to pay up to five workers the legally required wage, and only four employers on the list have failed to pay over 100 workers.

With no sign of their investigation losing momentum, £25.3 million will be spent on minimum wage enforcement in 2017-18.

The government are currently investigating over 2,000 open cases, with eligible employers being named and shamed after an investigation is closed.

Darren Chadwick, Croner Chief Commercial Officer, says:

“Despite the evident crackdown on pay, we are aware that thousands of workers are still not receiving their legal entitlement.

“Given the drive of the government’s enforcements, employers must act now to avoid detrimental damage to an organisation’s reputation by public shaming.

“In addition, it’s important to bear in mind that now employment tribunal fees have been removed completely, there is nothing to stop employees themselves escalating pay claims. It really is in an employer’s best interest to ascertain a correct pay structure is adopted throughout an organisation to avoid any risk of attracting the government’s attention, or facing a costly tribunal claim.”

Most Common Regions for Underpayments

The top three regions for underpayments are: the North West region with 36 employers failing to meet the National Minimum Wage, Yorkshire and Humber with 31 employers, and London with 20.

Most Common Sectors for Underpayments

The three most common industries failing to meet the wage are:

  • The hairdressing sector, with 59 employers failing to meet legal requirements. This sector has been found to owe nearly £121,000 to 195 workers.
  • Hospitality sector, with 50 employers owing over £77,600 to 224 workers.
  • The retail sector, with 22 employers owing almost £1.52 million in total to over 12,200 workers.

Outstanding Amounts for Employers

  • 126 employers had to repay up to £1,000
  • 98 employers had to repay between £1,000 – £10,000
  • 8 employers had to repay between £10,000 – £50,000
  • 1 employer (Argos) have had to repay over £1,000,000

As well as repaying the arrears, employers have also been fined a record £1.9 million by the government.

Croner Support

Croner are advising employers to review and address their pay structures now to avoid any risk of facing a tribunal in the near future.

Our employment law advisors can discuss the details of specific scenarios with employers, and our Croner Reward pay experts are on hand to assist with organisational benchmarking, pay grades, and structures.

To speak to an employment law advisor, please call 0844 728 0181.

To discuss pay structure within your organisation, call a Croner Reward pay specialist on 0844 728 0103.

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Croner is the UK’s leading provider of HR, Health & Safety, pay and reward services. From expert advice to onsite training and consultancy, Croner has supported thousands of organisations with the management of people and safety for over 70 years.

From the Vale of Glamorgan, Croner Business Manager Paul Collins is the dedicated point of contact for a number of organisations in Wales. Paul has advised and supported hundreds of employers in the area, ensuring the best standard of service and ideal solutions for all partners.

The key areas of Croner’s support include, but are not restricted to:
– 24/7 HR and Health & Safety advice lines, 365 days a year
– On site consulting, including crisis support
– Instant Employment Tribunal assistance, with a successful resolution rate of 85%
– Legal Expenses Insurance to cover the cost of representation and awards at Employment Tribunals
– Pioneering HR software for employee and case management and reporting
– Pay and benefits services: Salary search and reports, job evaluation, bespoke research, market rate reports, pay modelling, executive remuneration, overseas pay
– Employee Assistance Programmes and advice lines to ensure wellbeing

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