Enforcing the National Minimum Wage – Keeping up the Pressure

The TUC estimates that the number of workers not being paid the legal National Minimum Wage (NMW) in both the formal and grey economies is at least 250,000. Employers who deliberately set out to swindle their workers and those who are simply careless over their responsibilities must come to be sure that there will be serious consequences if they fail to comply with the minimum wage. Our goal must simply be to get to a position where cheats are never allowed to prosper from their misdeeds. Failing to pay the national minimum wage:

• effectively robs low paid workers of some of the income that is their due;
• leads to good employer s being undercut by bad and bad by the worst ;
• cuts the spending power of minimum - wage workers, meaning fewer customers on the high - street, and
• takes money away from the Exchequer, putting further pressure on the public finances

In short, cheating on the national minimum wage is a very antisocial act as well as an illegal one. In this report, the TUC argues that the NMW enforcement regime must be subject to a process of continual improvement in order to keep up with those employers who actively look for new ways to try to evade their responsibility to pay the minimum wage.

This report briefly examines the position of 10 vulnerable groups of workers and sets out the following 10 point plan for sharpening NMW enforcement during the next parliament :

• Invest an extra £1 million per year to ensure that workers know their rights
• Hire 100 more wages inspectors to crack down on employers who flout NMW law
• Produce stronger official guidance so employers know their responsibilities
• Create a legal gateway for HMRC to share information with local authorities, the Maritime and Coastguard Agency, Civil Aviation Authority and the Driver and Vehicle Services Agency where relevant
• Name and shame all employers who fail to pay the minimum wage
• Introduce a government guarantee to pay arrears when employer goes bankrupt or simply vanishes
• Prosecute the worst offenders and increase the maximum fine to £75,000
• Target enforcement on low pay areas and industries
• Enforce the minimum wage for apprentices, as underpayment is rife in this sector
• Promote collective bargaining so that potential NMW problems can be prevented at source by trade unions.

Download the full report