Employers who deliberately flout minimum wage laws will be publicly named under a new scheme announced by Employment Relations Minister Edward Davey today.
Cases where employers breach the rules are to be publicised by the Department for Business, Innovation and Skills (BIS) from 1 January 2011 - giving them three months to 'put their house in order'.
The new sanction was announced as the new rates for the National Minimum Wage come into effect. They are:
· £5.93 per hour for low paid workers aged 21 and over, increased from £5.80 and with the adult rate coming into effect at 21 rather than the previous 22;
· £4.92 per hour for 18-20 year olds, increased from £4.83; and
· £3.64 per hour for 16-17 year olds, increased from £3.57.
For the first time there is also an apprentice minimum wage of £2.50 per hour. The new rate applies to those apprentices who are under 19 or those that are aged 19 and over but in the first year of their apprenticeship. All other apprentices are entitled to the standard minimum wage rate for their age group.
Employment Relations Minister Edward Davey said:
“Bad publicity can be a powerful weapon in the fight against employers who try to cheat their workers and their competitors. Their reputation can be badly damaged if they are seen to be flouting the law.
“Responsible employers should also make themselves aware of the new rates that come into effect (1 October). The increases to the National Minimum Wage this year are appropriate for the economic climate. They will strike a balance between helping the lowest paid whilst at the same time not jeopardising their employment.
“The Low Pay Commission estimates that around 970,000 people stand to benefit from these increases. “
The new rates come in as Her Majesty’s Revenue and Customs (HMRC) and BIS publish their National Minimum Wage Annual Report for 2009/10. It reveals HMRC identified over £4.4 million in arrears for over 19,000 workers. The average arrears per worker for the year were £228, which is 18% higher than the previous year (£193 for 2008/9).
Regulations cracking down on rogue operators in the modelling and entertainment sector - banning up-front fees for aspiring models and significantly tightening the conditions attached to them elsewhere -
also come into force today (1 October).
They are part of the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010. Taken in the round this legislation reduces overall regulatory burdens by eliminating unnecessary suitability checks when workers are placed in permanent posts – except when the work involves vulnerable people.
Notes for editors
1. The Low Pay Commission was established following the National Minimum Wage Act 1998 to advise the Government about the National Minimum Wage. Commissioners have backgrounds in business, trades unions and academic labour relations. For more details, and copies of the full report, see http://www.lowpay.gov.uk/
2. The Low Pay Commission's 2009 report recommended that information should be available on employers who have shown wilful disregard for minimum wage laws.
3. When the minimum wage was launched in 1999, the main rate was £3.60.
4. The accommodation offset will rise from £4.51 per day to £4.61.
5. The Pay and Work Rights helpline number is 0800 917 2368. As well as receiving and investigating complaints about non-payment of the minimum wage, the helpline offers advice and information in more than 100 languages.
6. The National Minimum Wage Annual Report for 2009/10 can be found here: www.bis.gov.uk/nmw
7. The Employment Agency Standards inspectorate is responsible for enforcing the Conduct of Employment Agency and Employment Business Regulations, carrying out inspections and responding to complaints. More information is available at:
8. The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010 ban outright the practice of charging up-front fees to would-be models. The absolute ban will not extend to the placement of other entertainers, such as actors, musicians and extras. The risk of abuse is significantly lower in those sectors, and a ban would have a disproportionate effect on perfectly legitimate businesses. However, the amendments will extend the current seven-day cooling off period to 30 days for this group, which will also benefit from increased rights on cancellations and refunds over the period.
9.BIS' online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.
Phone: For enquiries please contact the issuing dept