HMRC has published a list of minimum wage offenders this morning. It has responsibility for policing enforcement of the minimum wage on behalf of the Department for Business, Innovation and Skills.
This list poses more questions than answers. The first, and obvious question, is why it has received relatively little attention in the press. There are stories, but I have seen nothing like the level of interest that HMRC's list of top tax evaders attracted and yet in a very real way the abuse of the minimum wage is at least as significant in imposing real cost on both individuals and society at large.
Second, there has to be real doubt about how this list was chosen. As the BBC note, one Premier League football club was apparently found guilty of abuse of the minimum wage last year and had to pay £27,500 in wages as a result, split between 3,000 people. You could, of course, argue as a consequence that this means that each worker only benefited by about £9 and as a result that this settlement falls into the ' insignificant' category but one of the employees named by HMRC did in fact underpay £149 split between 15 workers, or under £10 each. In that context the Premier League football club was of much more interest, but was not named. Why was that?
And why is it that a settlement of £149 is apparently enough to put you in the top 25 worst offenders of minimum wage? Does that imply that HMRC is simply not doing enough? Or is it that it does not have enough resource? Or is it that despite promises made last year this years budget for tackling minimum wage abuse has, I am reliably informed, gone down by 3%?
The one thing I can say with considerable confidence is that it is not because there are no cases to find. Abuse of the minimum wage amongst outsourced workers is notorious and whilst one, recent, case will undoubtedly help them when it comes to payment for travelling time I'm sure that there is much to do in this area, and yet there was no mention of any sort of such employees or their employers in the list published. Again, why was that when this is so well-known as an area for abuse? Is HMRC turning a blind eye, or have they been told not to embarrass the privatisation of outsourcing process by drawing attention to the fact that this is only viable when workers are exploited?
The minimum wage is a vital part of the attack on poverty. It is, of course, too low: we all know that it should be raised to the level of a living wage, but whichever level it is set at it is vital that sufficient resources are dedicated to ensuring that it is paid, and that the right abusers are named if that is considered to have an appropriate deterrent effect. Letting off large employers, and those that might be conflicted by political preference indicate a system that is not being run equitably and that is an affront to the whole spirit of the minimum wage. It also confirms what so many small and medium-size enterprises think, which is that HMRC is set against them.
As on so many other issues, HMRC have got to do better. Right now there are no signs that it will.
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There has been much comment on why larger and better known employers are not on this naming and shaming list. The answer is a decision that employers would only fall under the new “name every one” rules if the enquiry was started after the policy was announced in the last months of 2013.
Any one whose enquiry was started earlier in 2013 will come under the restrictive old rules where the total arrears had to exceed £2000, AND the average per worker exceed a certain amount AND some other aggravating factor had to be present such as it being the second time the employer had been caught. The reason why the premiership football club has not been named will probably be the low average arrears.
Large employers take longer, because there are large amounts of data, and they will have clever advisers who will make technical objections to the legal basis of HMRC’s calculations. HMRC does not have the resources to always make large calculations itself and will ask the employer to do them subject to sample checking, which gives the employer a chance to delay.
I hope BIS and HMRC are more imaginative with future namings as the media will soon get bored with lists like this. There is no attempt to show why these employers should be of interest to at least their local media or to mention points of interest like outsourcing. While some criticism is a little unfair the departments are indeed unenthusiastic about naming employers.
You are spot on with your comments on resources.
Thanks for the explanation
Appreciated
I’ve just seen the Metro in which “A spokesman from BIS said the football club fell under old rules”, which confirms my surmise above. Not sure why some media did not pick up on this.
‘…or have they been told not to embarrass the privatisation and outsourcing process by drawing attention to the fact that this is only viable when workers are exploited?’
I can’t say specifically that this applies to HMRC, Richard, but I’ve seen and heard enough over the past year to 18 months from people working elsewhere in government and the public sector to know that this attitude is now pretty much endemic. Indeed, so well entrenched is it that it’s now part of the organisational culture in many cases, which means that nobody has to be “told” to do this. They just know that they must.
As ever, we are on a wavelength
The Departments also reported £600K arrears which HMRC secured for workers from a domiciliary care company. This is indeed a shocking indictment of what happens when work is outsourced to the privateers.
HMRC could probably get similar results from most of the 2500 private companies that undertake this work for local councils, if they had the resources.
However enforcing NMW is only part of the answer in this sector, as previously the going rate for these workers was well above NMW, and competition between the companies is dragging the workers down towards NMW, or below when they don’t count the hours properly.
A return to the public sector is the only real answer, but in the mean time how about a statutorily enforceable living wage for these workers?
Wholeheartedly agree