According to the Guardian newspaper, of the 700 employers identified by HMRC as failing to pay its workers the minimum wage only 3 have been prosecuted in the last two years. That is not typo, I really do mean just three out of seven hundred. Or if expressed as a percentage; 0.428%, that’s less than half a percent.
Apparently this issue causes the business minister Margot James “concern” and the high costs of prosecuting cases have been cited as responsible.
However, I believe that this is more than an issue of concern, it is frankly unacceptable and does nothing other than encourage unscrupulous employers to continue to exploit the lowest paid earners in our society, a group which has already been denied access to justice following the introduction of unaffordable Employment Tribunal fees.
These 700 employers collectively underpaid more than 13,000 workers over £3.5 million and yet 99.57% got away with it. Whilst prosecution costs may be substantial, compare them with how much tax and national insurance is being lost when employers continually underpay employees.
HMRC may well bring civil claims against offenders but this merely results in a fine which is usually nothing but nominal to the employer. When you compare that to the hardship faced by the under-earning worker it is clear that the system is unfair. The risk of prosecution needs to substantially increase to act as a deterrent to unprincipled employers and protect workers.
The Guardian also reported that the number of workers identified as being owed arrears of pay more than doubled in 2015/16 to 58,000 people from 2014/15’s 26,000. If the trend continues next year that would mean over 116,000 victims of arrears. Conversely even if the number of prosecutions for failing to pay the minimum wage doubles we can look forward to just 6 prosecutions. Yes, just 6. More needs to be done.