Support for employers as Government National Minimum Wage breach list published

The Government has released its latest ‘naming and shaming’ list of employers who have breached National Minimum Wage. The list shows employers who have failed to comply with the regulations from 2017 to 2019. There are 202 employers named, with underpayments totalling almost £5 million. Employers appearing on the list include several major high street brands, as well as smaller businesses and sole traders. 

Julie Moore, tax partner, RSM UK says: ‘Whilst it is now more widely understood that breaches of the National Minimum Wage are commonly due to technicalities rather than a deliberate intention to underpay workers, the headlines that go with the publication of the list could be reputationally damaging to employers and cause disruption in their workforce. Employers who find themselves on the naming and shaming list often have an influx of employees querying whether they are entitled to any repayment, or whether the cause of the breach has been rectified. Where an employer has minimal or unclear communications with their workforce around the breaches, or hasn’t introduced and communicated any improved processes to mitigate further breaches, there is a risk than an employee could reach out to ACAS and/or HMRC to query how their pay is calculated. This would likely result in a further NMW investigation by HMRC, a process which is time consuming and disruptive to the business.’

Today’s list of non-compliance states the breaches are for the following reasons:

• 39% of employers deducted pay from workers’ wages
• 39% of employers failed to pay workers correctly for their working time
• 21% of employers paid the incorrect apprenticeship rate

The Government states ‘whilst not all minimum wage underpayments are intentional, there is no excuse for underpaying workers’ demonstrating HMRC intends to continue undertaking compliance reviews to ensure that workers are taking home the pay that they are entitled to.