Lord Kinnock – 2016 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Lord Kinnock on 2016-05-18.

To ask Her Majesty’s Government how many prosecutions for failure by employers to pay the National Minimum Wage have been undertaken since the National Minimum Wage Act 1998 came into force; what plans they have to improve the legal enforcement of the National Minimum Wage; and when those improvements will come into effect.

Baroness Neville-Rolfe

Since the introduction of the National Minimum Wage (NMW) Act there have been 9 prosecutions for NMW offences.

However, prosecutions are not necessarily the best approach in most cases. Criminal sanctions against companies mean that employees – the ultimate beneficiaries of enforcing the NMW – end up waiting longer for their lost earnings to be paid back.

From April this year we increased the civil penalties incurred by non-compliant workers to 200% of the arrears owed to the worker, up to a maximum of £20,000 per worker – having recently increased the penalty cap from £5,000 per employer. We have also increased the enforcement budget for the National Minimum and Living Wage to £20 million for this year, up from £13.2 million in 2015/16. The additional funds will be used to bolster HMRC’s resources through an increase in the number of compliance officers available to investigate NMW abuses, as well as to conduct risk-based enforcement in sectors or areas where there is a higher risk of workers not being paid the legal minimum wage.

We will also continue to publically name and shame eligible employers in Government press notices. We expect this tobe a deterrent to employers who would otherwise be tempted not to pay the NMW, but also an incentive for all employers to make sure that they are consistent with the law.