NMW enforcement: what the **** is going on, Mr Boles?

“Our policy of naming and shaming employers who ignore the law means there are consequences for their reputation as well as their wallets.”

So said BIS Minister Nick Boles in February, when naming & shaming another 92 employers for non-compliance with the National Minimum Wage. Though it’s questionable how much those reputations were damaged by a few reports in local media, and not much else.

But what about those wallets?

Well, the 92 employers certainly had to pay back some £1.873 million in NMW arrears to a total 3,352 workers. But £1.742m (93%) of that £1.873m was paid back to 2,519 (75%) of the 3,352 workers by just one of the 92 NMW rogues, Total Security Services Ltd, with a mere £131,056.59 paid back by the other 91 penny-pinching employers (an average of just£1,440 per employer). So, most of those corporate wallets took a pretty small hit.

But what about the financial penalties that the 92 NMW rogues would have paid to HM Government? Since March 2014, employers found by HMRC to have breached the NMW have had to pay a financial penalty to HMG equivalent to 100% of the total NMW arrears owed (previously, the penalty rate was just 50% of the arrears owed).

Which makes it somewhat surprising to learn – from the minister’s answer today to a parliamentary question by Caroline Lucas MP – that the 92 employers named & shamed in February were “issued with a combined total of over £629,000 in penalties”. Which is not – and Gem ‘The Doctor’ Reucroft can check my maths if she wants – 100% of £1.873m. It’s not even 50% of £1.873m. It’s just 33.6%.

Not only that but, if the 91 NMW rogues other than TSS Ltd were issued with 100% financial penalties on their combined arrears of £131,056.59, then TSS Ltd can only have been issued with a financial penalty of some £498,000. Which is not even 50% of £1.742m. In fact, it is just 28%.

So, what the fuck is going on, Mr Boles?

PS – Worth noting also that, according to the minister’s reply, eight of the 92 NMW rogues have not actually paid the financial penalty issued against them. However, this is not particularly surprising. Most of the 92 are economic minnows, who have a tendency to go out of business. I wouldn’t be surprised if at least some of the eight non-payers never pay the penalty (they probably haven’t paid the NMW arrears, either).

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About wonkypolicywonk

@wonkypolicywonk is a policy minion who has been lucky enough to work at Maternity Action, Working Families, Citizens Advice, the National Audit Office, the Law Society, and Amnesty International UK. He currently bangs his head on a desk in Parliament.
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