Simply 21 firms have been prosecuted for not paying the minimum wage in 15 years, shock new figures present.
Specialists mentioned the small numbers “emboldened” rogue employers who paid workers far less than they were due as ministers have been warned to get a grip of the issue, amid claims it was hampering financial progress and rising the burgeoning welfare invoice.
Between 2008 and 2023, solely 21 employers have been efficiently prosecuted for underpaying the minimal wage, with a further case accepting a warning, in accordance with official figures from the Division for Enterprise and Commerce.
Ministers say legal prosecution is reserved for essentially the most critical circumstances, which contain deliberate underpayment or reckless pay practices.
These are normally the place there’s a wider public curiosity, or the place employers are persistently non-compliant or refuse to cooperate with HMRC, they are saying.
Final 12 months 524 companies have been “named and shamed” for failing to pay the minimal wage, leaving greater than 172,000 employees out of pocket, and ordered to repay employees practically £16 million, plus a further monetary penalty.
However Labour peer Lord Sikka, emeritus professor of accounting on the College of Essex, described these punishments as “puny” and known as for extra firms to be prosecuted.
The figures on prosecutions have been revealed by minister Baroness Jones of Whitchurch in response to a query from Lord Sikka.
He instructed The Impartial: “Our enforcement is extremely weak.
“I believe that is a part of the British illness the place the regulation will not be actually enforced, as a result of they don’t make use of sufficient enforcers. It actually then emboldens rogue employers as a result of they’ll then sport the system. And yearly lots of of 1000’s of employees are denied the minimal wage.
He known as for extra prosecutions and mentioned the penalty for not paying the minimal wage “ought to not less than equal the remuneration of the corporate board. The bigger the corporate the larger the penalty”.
He added {that a} failure to pay the minimal wage, introduced within the Labour prime minister Tony Blair has an influence “at many ranges of the economic system. It may enhance progress and cut back the welfare funds – if persons are incomes extra they’ve to assert much less welfare.”
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