Monday, 26 January 2015
Underpaying Minimum Wage: A National Concern Guest Post
A recent report released by the Department for Business, Innovation and Skills has brought to light the full extent of some employer's failure to pay national minimum wage to their workers.
In total 37 firms have been shown to violate the law, which has resulted in a combined fine of £51,000 and a payout of £177,000 to employees missing their wages.
Who is to blame?
One of the most prominent companies under examination is high street clothing retailer H&M. The organisation which employs over 9,500 people in the United Kingdom has blamed their actions on 'time logging errors' in their system. The average wage paid to those affected was a mere £4.82.
Another business found to have underpaid their customers is the motorway service station company Welcome Break, which underpaid 20 of its workers for a sum totalling 1,319; creating an average underpayment of £66 per employee.
Welcome Break's actions were exposed when an employee lodged a complaint with the HMRC to explain that her pay rate had not increased in line with the national minimum wage following her 21st birthday. Before long other employees were revealed to be in the same position.
Of all the companies to be exposed, the organisation responsible for the biggest violation of payment is Kings Group; a Hertfordshire estate agent. This organisation's main company cost 53 workers a total of £53,809, while their sister company Kings Group Lettings LLP underpaid 49 staff for a total of £26,893.
Minimum wage: Employment law facts & figures
Minimum wage is a completely non-negotiable figure that differs depending on an employee's age. Adults ages over 21 must receive a minimum of £6.50 an hour, 18-20 year olds are given £5.13, and 16-18 year olds take home at least £3.79.
When an employer deviates from providing fair pay they're in direct violation of the National Minimum Wage Act 1998, and a failure to provide the amount of money due is certainly grounds for an employment law tribunal.
Criticism of minimum wage
The adult minimum wage is already largely considered to be too low to assist the personal situation of most UK residents. The Tory, Labour and Liberal Democrat parties have all expressed a desire to raise the amount.
Labour has pledged to raise the minimum wage if they win the 2015 general election, while Conservative Councillor of the Exchequer, George Osborne, has spoken of the possibility that minimum wage could rise to £7.00 an hour within the next few months if the economy continues to improve.
This is one of many recent issues affecting employees on minimum wage. Several firms have been accused or finding ways to avoid paying employees their share through the use of underhanded tactics like charging employees for the use of company uniforms and underpaying interns.
Other unfair methods prevalent in the underpayment of minimum wage include deliberately under-recording working hours, and refusing to pay travel expenses where necessary.
Result of the revelations
The TUC has drafted a plan to ensure that minimum wage payments are enforced, and Frances O’Grady, the general secretary of TUC, has summed up the shameful, dishonest nature of underpayment by claiming that “Failing to pay the minimum wage is an antisocial act that squeezes those workers who have the least.
She has also spoken about the need for larger government assitance: “Ministers must also step up enforcement action with more prosecutions, higher fines and a bigger team of enforcement officers to catch the cheats."
Will these new rules make a difference? We'll have to wait and see.
If you have concerns regarding minimum wage issues or the legislation of any other form of employment law concern, be sure to contact a professional employment law solicitor to better your rights ans entitlements.
Submitted on behalf of Nationwide Employment Lawyers
Please note that whilst every effort is made to maintain accuracy of the content in this article; we cannot take responsibility for any errors. This author is not a Lawyer or HR Specialist and this cannot in any way constitute a substitute for Employment Law advice. All facts should be cross-checked against other sources. Contact Nationwide Employment Lawyers should you require specific advice.
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