New ‘naming and shaming’ scheme for NMW rule breakers

Between 2012 to 2013 HMRC identified 736 employers who failed to comply with NMW consequently leading to the recovery of £3.9 million in unpaid wages for over 26, 500 workers. New rules effective from today (1st October, 2013) are targeting these figures. Employers who fail to pay the NMW could forfeit their reputation by being publicly named and shamed under the revised NMW naming scheme which has stripped back regulations, making it is easier to name employers who break minimum wage law.

Rogue employers will not only risk reputational consequences but also economic sanctions as HMRC has the power to require payment, issue fines of up to £5,000 and even take civil or criminal action. These new rules are part of the government’s efforts to toughen up enforcement and increase compliance of the NMW.

A little reminder…

The NMW must be paid to all persons who fall within the category of employee or worker. For recruiters this will usually cover temporary employees and PAYE temps but for individuals working through umbrella or personal service companies, it will be the umbrella or PSC rather than the recruiter who is responsible for ensuring that the NMW is paid.

Today’s increase in the NMW (workers aged 21 and over will now receive £6.31 and workers aged at least 18 but not yet 21 will receive £5.03) can naturally represent an additional cost of supply. Where NMW is relevant, whether this cost is met from your margin or can be passed on to a hirer will depend upon what has been agreed in your terms with the Client – care is always required!

For specialist advice on all pay and contractual matters contact our team on 01273 236236.

Does the recent ET decision in Thompson v Paymaster (October 2013) doom the umbrella model?
Knowledge is Power seminar – London: 27th November 2013