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Eversheds comment: Bad employers must believe they will be caught if UK minimum wage enforcement to work

  • United Kingdom

    01-09-2015

    Commenting on a government announcement that there will be tougher penalties for non-payment of minimum wage Simon Rice-Birchall, partner at law firm Eversheds, says:

    “Good employers will welcome an increased focus on enforcing the minimum wage as they risk being undercut by the bad employers who knowingly flout the law. However, some will be sceptical whether this represents or will ring in real change, or whether this is simply a case of increasing the threat of penalties.

    “Securing payment of the UK minimum wage is seen as the priority, not incurring costs to prosecute employers who have made accounting mistakes. Therefore, the number of prosecutions by HMRC may not therefore grow significantly.

    “One tool in the HMRC weaponry which may warrant more targeted and effective use is the mechanism for naming and shaming employers who fail to pay the minimum wage. Currently, this system is not as robust as it might be in identifying a small minority of employers which flout rather than fumble over payments. Higher penalties do not, in themselves, lead to a change in behaviour unless bad employers believe they will be caught.”

     

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