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Firm named and shamed for flouting National Minimum Wage

Posted: 10th October 2012   In: Business Employment

A Government minister has publicly named a company that failed to pay an employee the National Minimum Wage (NMW).

The move is part of an initiative by the Department for Business, Innovation and Skills (BIS) to name and shame companies that don’t adhere to NMW regulations. It shows the Government’s determination to get tough on companies that don’t fulfil their responsibilities to their employees.

The case involved Treena Professional Hair and Beauty salon in Leicester. The Minister for Employment relations, Norman Lamb, revealed that salon owner Rita Patel had paid an employee just £342 for four months work. The employee should actually have been paid a minimum of £3,703.22. Patel was ordered to repay the wage arrears by Leicester County Court.

The Government hopes that the fear of receiving bad publicity will be an important factor in convincing firms to abide by the regulations.

Mr Lamb 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 says it will continue to publicise cases where arrears of wages have to be enforced through the courts.

The scheme came into effect in 2011 and is one of several methods at the Government’s disposal to tackle the issue of non-compliance.

If a company has failed to pay the NMW in the past when the NMW rate was lower, it will have to pay the arrears at the current NMW rate. It could also face a fine of up to £5,000 and even be prosecuted.

Please contact Robert Bedford about the issues raised in this article or any aspect of employment law.