UK Government

Department for Business, Innovation and Skills: New team ready for blitz on minimum wage evasion

Press Release   •   Jan 04, 2010 11:16 GMT

The New Year will see a new team taking up the fight against rogue employers who refuse to pay their workers the National Minimum Wage.

HM Revenue and Customs’ (HMRC) new Dynamic Response Team will work on the most high profile and complicated National Minimum Wage cases faced by HMRC, particularly in areas where employers are using migrant labour to undercut competitors by paying below the minimum wage.

The team is funded from a £70 million Government fund, paid for by a levy on migrant workers, to support those communities that are feeling the impact of migration most strongly.

The team will be made-up of highly-trained specialist officers who are committed to providing a rapid response to cases across the UK ensuring that everyone who is entitled to the minimum wage receives it.

Business minister Pat McFadden said:

“The Government and HMRC are doing more than ever to make sure that those entitled to the Minimum Wage are receiving it. Evasion hurts both workers and responsible employers who play by the rules, so we are stepping up our fight against non payment of the minimum wage.

“The Minimum Wage is a key part of the Government's strategy to establish fairness in the workplace and the benefits of the minimum wage are felt by about one million workers every year, especially women and part-time workers.

Financial Secretary to the Treasury, Stephen Timms, said:

“The Government’s priority is to ensure that all workers are paid at least the National Minimum Wage, and HMRC enforce this robustly.

“This new Dynamic Response Team will respond quickly and effectively to National Minimum Wage non-compliance, making sure that employees are paid what they are legally entitled to.”

Communities Secretary John Denham said:

"Tackling the abuse of migrant workers is an important part of building a fair society.  Employers undercutting the wages of local workers put unfair pressure on businesses struggling to compete and cause resentment in the community."

The new team will work with other Government departments and Local Authorities to ensure the most effective action is taken to deal with non-compliant employers, including civil and criminal prosecutions where appropriate.

There are around 1 million low paid workers who benefit from the minimum wage and since April HMRC have helped around 14,000 workers re-coup over £3.5 million of wage arrears. This included more than £640,000 alone in the hospitality sector, a sector noted for low levels of pay.

HMRC already tackle serious breaches of minimum wage law, such as the Jacksons Butchers case in Sheffield, which was closed in 2009. Pauline Smout and David Jackson were prosecuted for wilfully neglecting to pay the National Minimum Wage and were both fined and ordered to pay compensation because they could not pay staff the arrears they were entitled to.

Notes to Editors

1. On 1st October 2009, the National Minimum Wage for those aged 22 and over was increased to £5.80; £4.83 for those aged 18-21; and £3.57 for those aged 16-17.

2. HM Revenue and Customs’ Dynamic Response Team will officially form in January 2010. Funding for the Team has been provided through the CLG Migration Impacts Fund."

3. David Jackson was prosecuted by HMRC in 2008 for: 

-  31(1) Employer refuses or wilfully neglects to pay NMW
- 31(2) Person fails to keep or preserve records
- 31(3) Person knowingly causes or allows false entry in records
- 31(4) Person produces or furnishes false records or information

4.  Pauline Smout was prosecuted by HMRC in 2008 for:

- 31(1) Employer refuses or wilfully neglects to pay NMW
- 31(2) Person fails to keep or preserve records
- 31(3) Person knowingly causes or allows false entry in records

Department for Business, Innovation & Skills

The Department for Business, Innovation and Skills (BIS) is building a dynamic and competitive UK economy by: creating the conditions for business success; promoting innovation, enterprise and science; and giving everyone the skills and opportunities to succeed. To achieve this it will foster world-class universities and promote an open global economy. BIS - Investing in our future.

Contacts

NDS Enquiries
Phone: For enquiries please contact the above department
ndsenquiries@coi.gsi.gov.uk