Minimum Wage: Non-payment

Treasury written question – answered on 14th September 2022.

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Photo of Stephen Kinnock Stephen Kinnock Shadow Minister (Home Office) (Immigration)

To ask the Chancellor of the Exchequer, how many investigations involving suspected non-compliance by employers with the National Minimum Wage Act 1998 and related legislation were carried out by HMRC in each year since 2015; and how many and what proportion of those investigations led to (a) financial penalties, (b) criminal prosecutions and (c) other enforcement action.

Photo of Stephen Kinnock Stephen Kinnock Shadow Minister (Home Office) (Immigration)

To ask the Chancellor of the Exchequer, how many employers were issued with a financial penalty for non-compliance with the National Minimum Wage Act 1998 and related legislation; and what the total value of those penalties was in each year since 2015.

Photo of Richard Fuller Richard Fuller The Economic Secretary to the Treasury

The Government is determined that everyone who is entitled to the National Minimum Wage (NMW) receives it.

HMRC balances recovering NMW arrears for workers as quickly as possible along with a robust approach to enforcement using a range of tools, including civil sanctions and the issuing of Labour Market Enforcement Undertakings (LMEUs), and Labour Market Enforcement Orders (LMEOs).

HMRC’s approach to compliance means they go beyond undertaking investigations and issuing penalties. HMRC also works with businesses to help them understand their obligations. Ultimately, HMRC want employers to get it right. It is far better for businesses and workers if an investigation is never needed.

The use of criminal prosecutions is reserved for the most serious of cases.

The outbreak of COVID-19 meant HMRC had to adapt and take pragmatic decisions about where and how to deploy resource in the most effective manner to ensure both customers and staff were protected whilst still ensuring that workers were receiving the money they were due. HMRC continued to consider all worker complaints and take enforcement action as appropriate.

The below table provides numbers for investigations, penalties, value of penalties, prosecutions, and employers from 2015-16 up to 2021-22.

Year

Number of Investigations

Investigations where arrears enforced

Investigations where a penalty was charged

Value of penalties issued

Number of prosecutions

Number of LMEUs

Number of LMEOs

2015/16

2,667

958

815

£1,780,467

0

0

0

2016/17

2,674

1,134

822

£3,892,976

4

0

0

2017/18

2,402

1,016

810

£14,070,621

1

0

0

2018/19

3,018

1,357

1,008

£17,134,737

0

8

0

2019/20

3,376

1,260

992

£18,453,289

1

19

0

2020/21

2,740

994

575

£14,064,688

0

5

0

2021/22

2,835

898

696

£13,173,062

3

40

1

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