Named and Shamed - What Are the Consequences for Underpaying Your Workers?
A record number of employers have been named and shamed for underpaying workers as the government publishes its largest ever list of National Minimum Wage and National Living Wage offenders.
The list gives the names of 360 employers who have underpaid a total of 15,520 workers by £995,233. The sectors with the most offenders are retail, hospitality and hairdressing.
It is the first time the list has included employers that have failed to pay the new National Living Wage to eligible workers (those aged 25 and over).
HMRC has issued penalties in the region of £800,000 as well as ensuring workers able to recover any monies that are owed to them.
Excuses for underpaying workers included:
using tips to top up paydocking workers' wages to pay for their Christmas partymaking staff pay for their own uniforms out of their salary
Such reasons are unlawful and cannot be used as loopholes to avoid the obligation to pay the National Minimum or National Living Wage.
Best Practice
Employers have a legal duty to ensure that workers are paid the National Minimum Wage and the National Living Wage where applicable.
The government initiative of naming and shaming those employers who do not comply with this obligation will not only cause offending businesses a great deal of embarrassment but also has the potential to inflict long lasting reputational damage on those offenders. For instance, attracting and recruiting workers may become more difficult if potential workers see the employer has been 'named and shamed'. Further, potential clients or customers may be less likely to do business with an organisation that appears on the list.
There may also be instances where employers who have been named on this list will have to disclose such information in the future. This may arise for example in tenders when bidding for work. In such situations a previous naming on a government list could prove detrimental to an organisation's future success.