The number of national minimum wage whistleblowing complaints, in which whistleblowers reported companies to the HMRC for underpayment of the national minimum wage and national living wage, has more than doubled in 2017, compared with the year before.
National Minimum Wage Whistleblowing Complaints Rise
The HMRC received more than 5000 reports from whistleblowers regarding underpayment of the national minimum wage and national living wage during 2017, up more than 100% compared with 2016.
Companies that fail to pay the correct national minimum wage and national living wage are now regularly ‘named and shamed‘ by the Department for Business, Energy and Industrial Strategy (BEIS), as well as being fined for the breach and forced to pay back pay to those that have been underpayed. Primark and Sports Direct topped the last ‘named and shamed’ list, which was released last December by the BEIS. Primark, who came 3rd on the list, had to pay back pay of £231,973 to 9,735 employees, after having deducted the cost of uniforms from its employees wages, which took those employees wages below the national minimum wage. Furthermore, Sports Direct and its staffing agencies, Best Connection and Transline, came in 4th, 1st, and 2nd respectively on the list. Sports Direct had to pay back pay of £167,036 to 383 workers, whilst Best Connection was ordered to pay £469,273 in back pay to 2,558 workers. Meanwhile, Transline had to pay back pay of £310,302 in back pay to 1,421 workers.
Part of the reason for the increased number of reports is because the introduction of the national living wage in 2016, has increased the numbers of those who are entitled to be paid a minimum wage to 1.6 million, from just a million prior to its introduction.
The reasons as to why employers fail to pay the correct minimum wage are many and varied. However, common mistakes made include the following:-
- Failing to properly factor in overtime and the actual hours worked
- Deducting monies for the cost of equipment, uniforms, and tools
- Continuing to pay the apprentice rate to an employee over the age of 19 beyond the first year of their apprenticeship, instead of the higher rate that applies to the employees age group
The fines that can be levied on those that are in breach of their obligations to pay the correct minimum wage recently increased from 100% to 200% of the arrears owed by the employer, with a cap of £20,000.00 per employee.
How To Report An Organisation That Is In Breach
Anybody who has knowledge of a company or organisation that is in breach of its obligations to pay the correct national minimum wage and national living wage can report them to the HMRC. This can be done by one of the following methods:-
- By completing the online form, which can be found by clicking here
- By telephone on 0800 917 2368
- By post. You should write to: HM Revenue and Customs – National Minimum Wage enquiries, Freepost PHQ1, Newcastle Upon Tyne, NE98 1ZH
Given that inflation is continuing to outpace the value of pay rises, compliance with the minimum wage rules is being monitored more closely than ever by staff and others. Accordingly, national minimum wage whistleblowing is likely to continue increasing, with reports to the HMRC set to rise again in 2018.