The government has recently published a list of employer that it has found to be in breach of the provision for the National Minimum Wage. The list consists of approximately 200 employers, who have failed to pay their workers the legal minimum wage.
The current National Minimum Wage rates are:-
• 25 years and older: £7.20 per hour
• 21 – 25 yeas: £6.70 per hour
• 18 – 21 years: £5.30 per hour
• 16 – 17 years: £3.87 per hour
• Apprentices: £3.30 per hour
The apprentice rates apply to apprentices aged 16 – 18 years, and those aged 19 years and over who are in their first year. All other apprentices are entitled to be paid the National Minimum Wage for their age.
The naming and shaming of employers who breach the National Minimum Wage is part of the government’s commitment to effective enforcement of the National Minimum Wage.
In addition, the employers have to re-pay the minimum wage at the current National Minimum Wage rate, they can also face penalties of up to £20,000 per worker. In the most serious cases employers can be prosecuted.
On 1st April 2016 the National Living Wage became law and workers aged 25 or over were not in the first year of an apprenticeship are entitled to receive at least £7.20 per hour. This figure will increase by 2020 to £9.00 per hour.
Employers will be aware of significant reputational damage by the adverse publicity involved in being named and shamed. The retailer Sports Direct has recently been heavily criticised in the press for alleged breaches of the National Minimum Wage and National Living Wage, and has recently made a commitment to improve the way in which it treats its workers. It is said that the adverse publicity of the parliamentary enquiries, and various other enquiries into its working practices, have significantly adversely affected its share price, and this had led to widespread criticism from shareholders about the HR practices within that organisation, together with widespread concerns about the government’s processes of the company.
If you would like to discuss any employment law issues, please contact our Employment Law specialist team.