WIREDGOV

Norman Lamb, Minister for Employment Relations, has recently taken the move of naming an employer under the BIS Scheme for naming employers who flout National Minimum Wage (NMW) law.

Leicester based hair and beauty salon owner, Mrs Rita Patel trading as Treena Professional Hair & Beauty, neglected to pay £3,361.22 in arrears of the NMW to a former worker following an investigation by HM Revenue and Customs (HMRC), which has resulted in HMRC enforcing the debt through the court.

HMRC’s investigation showed that over a period of four-and-a-half months, Mrs Rita Patel paid only £342.00 to a worker in her hair and beauty salon. Under the NMW Act the worker was in fact legally entitled to £3,703.22 for work undertaken during that period.

Norman Lamb, Minister for Employment Relations said:

“The law is clear. Any worker who is entitled to the minimum wage should receive it, that’s why we are committed to clamping down on those who break the law. Where arrears of the minimum wage are identified by HMRC they will always be pursued. There is no excuse for not paying the NMW in the first place but failing to pay on being required to do so by investigators from HM Revenue and Customs is unacceptable.”

The Government is committed to deterring employers who would otherwise be tempted not to pay the NMW and recognises that bad publicity is an effective way of doing this. In future the Government will publicise cases where arrears of wages have to be enforced through the courts. HMRC already issues a press release where an employer has unsuccessfully appealed against a Notice of Underpayment requiring them to pay arrears of wages.

The BIS scheme to name employers who flout minimum wage law came into effect on 1 January 2011. The scheme is one of a range of tools at the Government’s disposal to tackle this issue. Employers who pay workers less than the minimum wage have to pay back arrears of wages at current minimum wage rates and face financial penalties of up to £5000. In the most serious cases employers can be prosecuted.

Notes to editors:

1. There are currently seven criteria for naming, and an employer only has to meet one of these to be named:

i. There is evidence that the employer knowingly or deliberately failed to comply with their NMW obligations.

ii. There is evidence that the employer has previously received advice from HMRC about the steps they need to take to ensure future compliance with national minimum wage and has not taken those steps.

iii. There is evidence that the employer has failed to take adequate steps to keep or preserve NMW records.

iv. There is evidence that the employer has delayed or obstructed a NMW compliance officer in the performance of their duties.

v. There is evidence that the employer has refused or neglected to answer questions put to them by a NMW compliance officer.

vi. There is evidence that the employer has refused or neglected to provide information or produce documents to a NMW compliance officer.

vii. There is evidence that the employer refused or neglected to pay arrears of the NMW to workers, following HMRC intervention, which has resulted in HMRC taking action against the employer to ensure payment of arrears to workers.

HMRC will not refer cases to BIS unless the total arrears owed to workers are at least £2,000 and the average arrears per worker are at least £500.

2. In this case there is evidence that the employer refused or neglected to pay arrears of the NMW to workers, following HMRC intervention, which has resulted in HMRC taking action against the employer to ensure payment of arrears to workers.

3. Employers found to meet the criteria for naming are notified by BIS and invited to make representations against being named with a notice period of 28 days.

4. See www.bis.gov.uk/nmw for further information on the NMW naming scheme.

5. Details of employer

Employer: Mrs Rita Patel trading as Treena Professional Hair & Beauty

Address: 231 Uppingham Road, Leicester, LE5 4DG

6. The Government's economic policy objective is to achieve 'strong, sustainable and balanced growth that is more evenly shared across the country and between industries.' It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:

· To create the most competitive tax system in the G20

· To make the UK the best place in Europe to start, finance and grow a business

· To encourage investment and exports as a route to a more balanced economy

· To create a more educated workforce that is the most flexible in Europe.

Work is underway across Government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the Government wants the economy to travel.

7. BIS's online newsroom contains the latest press notices and 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.