Employers taking big risks

Employers who undertake actor/workers unpaid or below minimum wage are taking risks.

This paragraph from the businesslink.gov website accurately and succinctly describes the penalties employers face in addition to arrears they may owe:

If HMRC believes that an employer has failed to pay the NMW to a worker, they may serve a notice of underpayment. This will require the employer to repay arrears to each named worker and pay a financial penalty to HMRC. Since 6 April 2009 the penalty has been set at 50 per cent of the total underpayment (for periods starting on or after 6 April 2009) with a minimum penalty of £100 and a maximum penalty of £5,000. Employers who comply fully with the notice within 14 days of it being served will receive a 50 per cent discount on the penalty.

Criminal offences

“There are six criminal offences relating to the NMW. They are:

• refusal or wilful neglect to pay the NMW
• failing to keep or preserve NMW records
• causing or allowing a false entry to be made in NMW records
• producing or furnishing false records or information
• intentionally delaying or obstructing a compliance officer
• refusing or neglecting to answer questions, give information or produce documents to a compliance officer

The fine on conviction for each offence is up to £5,000 (level 5) where tried in the magistrates’ court (or the Scottish equivalent).

The most serious criminal cases are triable in the Crown Court (or Scottish equivalent). This means that employers who deliberately fail to pay the NMW may face a potentially unlimited fine.

Since 6 April 2009, HMRC has been able to use the search and seize powers in the Police and Criminal Evidence Act 1984 when investigating criminal offences under the National Minimum Wage Act 1998.”

More information can be found on the businesslink.gov site.