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New BIS scheme to enforce National Minimum Wage (NMW) by naming and shaming employers

You may have all heard about the BIS scheme which was launched on 1 January 2011 and set out to name employers who failed to pay their employees the NMW. Well now Norman Lamb, Minister for Employment Relations, has named the first employer – Rita Patel. The Leicester hair and beauty salon owner has been named for failing to pay £3,361.22 to former worker following an investigation by HM Revenue and Customs (HMRC).

HMRC have resorted to enforcing the debt through the courts. The Government argues (and I have to agree it is certainly arguable) that bad publicity is an effective way of deterring employers who may be tempted to pay their workers less than the NMW.

Currently HMRC issue a press release when an employer has unsuccessfully appealed against a notice of underpayment requiring them to pay arrears of wages.The government will now publicise cases where arrears of wages have to be enforced through the courts. 
At present, an employer must meet one of the seven criteria below in order to be named. These criteria are that there is evidence that the employer:

· knowingly or deliberately failed to comply with their NMW obligations

· previously received advice from HMRC about the steps they need to take to ensure future compliance with NMW which they have not complied with

· failed to take adequate steps to keep or preserve NMW records

· delayed or obstructed a NMW compliance officer in the performance of their duties

· refused or neglected to answer a NMW compliance officer’s questions

· refused or neglected to provide information or produce documents to a NMW compliance officer, or

· refused or neglected to pay arrears of the NMW to workers, following HMRC intervention, which has resulted in HMRC taking action against the employer to ensure payment of arrears to workers.

HMRC will not refer cases to BIS unless the total arrears owed to workers are at least £2000 and the average arrears per worker are at least £500.

So the moral of the story is that if you are an employer, ensure that you pay your employee’s the NMW. If you are unsure what the current rate is then here’s the link to check it – http://legaleyesam.blogspot.co.uk/2012/01/new-statutory-rates.html.

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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