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According to the Government’s latest Labour Market Enforcement Strategy report HM Revenue & Customs (HMRC) is to receive an additional £5.3 million of funding in 2017/18 to ensure businesses are paying employees the national minimum wage (NMW) and national living wage (NLW).
This follows on from a previous increase of £20 million in 2016, which has allowed the team to expand to more than 360 members of staff.
According to the report it is estimated that there were 362,000 jobs paying less than NMW/NLW in April 2016, which equates to around 1.3 per cent of all UK employee jobs.
Within its findings the Government flagged up accommodation and food services, the wholesale and retail trade and other service such as hairdressers and beauty as the worst offenders.
Shockingly of those who were underpaid, more than 40 per cent received wages that were at least 50p an hour below the NLW.
It is thought that this high rate of underpayment was what led to the increase in penalties on arrears from 100 per cent to 200 per cent in April 2016.
Currently HMRC enforces non-compliance with the statutory wage legislation in five ways:
Depending on the severity of the case employers can face one or all of the penalties listed above, so it pays to ensure that a business is compliant with the current NMW and NLW requirements.