An optician who paid his staff at rates up to 40% less than they were entitled to has become the first employer in the north-west England to be successfully prosecuted for national minimum wage offences.
Benjamin Gains, 28, who owns two optician stores in Liverpool, pleaded guilty to failing to pay four of his employees the national minimum wage, which will rise to £5.93 an hour for workers aged 21 and over from 1 October. He received a fine of £3,696 from HM Revenue & Customs (HMRC).
He attempted to hide the fact he wasn’t paying what he should by falsifying employee information and then neglected to produce appropriate documents, HMRC said.
Following initial checks by HMRC investigators, Gains altered contracts and other documentation, which he provided to support his claim that he was paying the minimum wage. He also altered pay rates by falsifying documents and backdating contracts to show different hours of working and removing staff entitlement to paid meal breaks.
Mike O’Grady, HMRC’s assistant director of criminal investigations, said the sentence “sends a clear message to employers, large or small, that HMRC will actively pursue those whom we suspect of flouting national minimum wage law”.
“If employers prevent HMRC officers from checking staff records, attempt to alter or falsify pay records and related documents and refuse to comply with the law they could receive a fine and a criminal record,” he added.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Gains is only the seventh criminal prosecution over the national minimum wage, which was introduced in 1998. HMRC normally takes civil action first, issuing an “enforcement notice” against an employer that fails to rectify their breach of the minimum wage. Criminal prosecutions are reserved for persistent offenders or employers who fail to provide proper documentation.
In 2008-09, HMRC found 1,746 cases of “non-compliance” with the minimum wage and issued 96 enforcement notices, according to the Low Pay Commission.
