Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

National living wageLatest NewsMinimum wagePay settlementsPayroll

Tougher deterrents needed to stop minimum wage breaches

by Ashleigh Webber 9 Nov 2021
by Ashleigh Webber 9 Nov 2021 HMRC regularly 'names and shames' organisations that breach minimum wage rules
Ink Drop / Shutterstock.com
HMRC regularly 'names and shames' organisations that breach minimum wage rules
Ink Drop / Shutterstock.com

The government’s policy of ‘naming and shaming’ organisations that break minimum wage rules is an effective deterrent against non-compliance, but tougher financial penalties are needed to further minimise incentives for underpayment.

This is according to the Resolution Foundation think-tank, which found that smaller firms are more likely to lose out because of the reputational impact “naming and shaming” can have on their organisations, while some larger organisations – including Primark, Tesco and Boohoo – have seen little impact on their share price or sales after being exposed on the government website for breaching minimum wage rules.

Its No shame, no gain? report suggests that policymakers should strengthen and raise the profile of HMRC’s existing programme of publicising the firms that break the rules, after the think-tank found only one in five firms had heard of the policy.

It says that more rigorous enforcement is needed to increase the chances that non-compliant organisations are exposed. While bigger firms hit the headlines when they are named, smaller organisations are more likely to be non-compliant, with the Resolution Foundation finding that minimum wage workers in micro-businesses are 37% more likely to be underpaid than those in the largest businesses.

Low pay

John Lewis and McColl’s among firms that paid staff below minimum wage

National living wage and national minimum wage rates confirmed for April 2022

Proportion in low-paid jobs lowest on record

Tougher financial penalties should also be brought in, it adds. The report estimates that a firm underpaying the minimum wage would currently need to be fined around 700% of arrears to effectively counteract the savings it makes, more than three times the maximum HMRC penalty of 200% of arrears.

Resolution Foundation economist Hannah Slaughter said: “Reputation matters for businesses, and the government should raise the profile of its welcome work to ‘name and shame’ those breaking minimum wage rules.

“However, naming dodgy firms only works when they are caught in the first place, so more widespread enforcement is needed. And fines are currently too low so there is little economic incentive for rule-breaking employers to change their ways.

“As well as raising the profile of the ‘naming and shaming’ regime, the government must introduce tougher financial penalties and more widespread enforcement to ensure that rule-breaking firms are caught and deterred.”

HMRC’s most recent round of “naming and shaming” earlier this year saw 191 organisations exposed for breaching minimum wage rules, including major employers such as John Lewis, McColl’s and The Body Shop.

Organisations that break minimum wage rules are fined and made to pay back what they owe to workers at current minimum wage rates.

Reward, compensation and benefits opportunities


Browse all comp and benefits jobs

Ashleigh Webber
Ashleigh Webber

Ashleigh is editor at OHW+ and HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support. Prior to joining Personnel Today in 2018, she covered the road transport sector for Commercial Motor and Motor Transport magazines, touching on some of the employment and wellbeing issues experienced by those in road haulage.

previous post
Soldiers and officers to be trained in sexual consent
next post
How finance apprenticeships can boost business

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

You may also like

Underpayment not reported due to ‘fear and insecurity’

25 Jul 2022

Pay all care workers a £10.50 hourly minimum...

30 Jun 2022

Six findings from the national living wage review

22 Jun 2022

Bolt drivers strike as union launches workers’ rights...

15 Jun 2022

Oxford study highlights best gig economy firms to...

9 Jun 2022

‘Real’ living wage announcement to be brought forward

30 May 2022

P&O Ferries boss denies reputational damage after mass...

27 May 2022

‘Small spike’ in minimum wage underpayment among 20-24...

13 May 2022

Living Wage employers pass 10,000 mark

11 May 2022

P&O Ferries told to return £11m furlough money...

28 Apr 2022
  • 6 reasons why work-based learning is better than traditional training PROMOTED | A recent Fortune/Deloitte survey found that 71% of CEOs are anticipating that this year’s biggest business disrupter...Read more
  • Strengthening Scotland’s public services through virtual recruiting PROMOTED | This website is Scotland's go-to place for job seekers looking to apply for roles in public services...Read more
  • What’s next for L&D? Enter Alchemist… PROMOTED | It’s time to turn off the tedious and get ready for interactive and immersive learning experiences...Read more
  • Simple mistakes are blighting the onboarding experience PROMOTED | The onboarding of new hires is a company’s best chance...Read more
  • Preventing Burnout: How can HR help key workers get the right help? PROMOTED | Workplace wellbeing may seem a distant memory...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2022

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2022 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+