HR · 6 January 2017

Government attempts new crackdown on business owners that fail to pay minimum wage

national minimum wage
The National Minimum Wage for over 25s in the UK currently sits at £7.20 per hour

The government has stepped up its commitment to bringing employers into line with their National Minimum Wage responsibilities, with the announcement of its first director for Labour Market Enforcement.

Sir David Metcalf, former chair of the Migration Advisory Committee and founding member of the Low Pay Commission, will set the strategic priorities for three government groups each targeting workplace exploitation.

The three groups that Metcalf will oversee are the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s National Minimum Wage enforcement team.

Firing a warning to Britain’s business owners not paying workers the minimum wage, Metcalf referenced the “rogue employers who exploit their workers and undercut honest businesses”.

“As the government has made clear, this will not go unpunished”, he said in a statement.

Metcalf will draw up an annual strategy to target the regions and business sectors particularly susceptible to poor employment practices, such as retail and social care.

The new role represents a statement in the government’s efforts to clamp down on business owners and employment agencies not paying the minimum wage.

In December 2016, the chancellor pledged an extra £4.3m a year into tackling the issue, taking the national spending for minimum wage enforcement to £25.3m.

Recent law changes have also meant that repeat offenders now face the possibility of up to two years in prison.

Small business minister Margot James reiterated Metcalf’s warning to guilty business owners, stating that “labour exploitation is absolutely unacceptable in a Britain that works for everyone”.

In October 2016, the government announced the largest increase to the minimum wage since 2008 – with over 25s now entitled to £7.20 per hour under law, as well as all other age brackets seeing an increase in rates.

To assist small businesses in adopting the increase, the government introduced changes to the Employment Allowance.

Available to employers paying class one National Insurance, the allowance threshold was brought up from £2,000 to £3,000. The government has claimed this will take 90,000 employers out of National Insurance contributions.

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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