A Tayside employment law specialist has called for tougher enforcement action on businesses that fail in their legal duty to pay the national minimum wage.
Noelle McLelland, partner at Thorntons Law in Dundee, said there was a need for stronger sanctions against companies that were exploiting workers and operating at an unfair advantage over legitimate rivals.
She was speaking in the wake of a major new TUC report which claimed that some unscrupulous firms were operating scams in order to avoid paying the legal minimum hourly rate in the UK of £6.50.
The union said it had found evidence of firms imposing charges on their staff for work uniforms, misusing interns, and clocking-off workers from time cards when a business such as a cafe was empty.
The TUC said some rogue employers deliberately under-recorded staff hours, refused to pay for travel between work sites, and some companies even folded in order to avoid fines when being investigated for operating illegally. It called for immediate action to increase compliance.
Ms McLelland said regulations protecting workers were being flouted with relative impunity as sanctions failed to hit home.
“Although preventative measures are already in place to deter businesses from malpractice, including naming and shaming, and these were tightened up by the Government, the number of employers named and shamed remains extremely low,” she said.
“Whilst naming and shaming could be an effective deterrent, particularly in the case of a high-profile employer being reprimanded for not adhering to the law, it will only work if it actually happens.
“Although it’s unlikely that fines for not paying will be increased to £75,000, there still does need to be a significant improvement in the enforcement regime, as current fines of £5,000 and naming and shaming don’t seem to have made a huge impact.
“Many issues will have also gone undetected, as vulnerable employees such as immigrant workers, young people and those on zero hours contracts may be hesitant to raise any issues for fear of losing their job, as well as the cost of raising tribunal proceedings.
“Businesses that do not administer the national minimum wage are not only exploitative of their workers and undermining the law, but they are also taking an unfair advantage of other businesses that adhere to the rules.
“Actions must be taken to strengthen the enforcement of the law to ensure that all employees can exercise their right to minimum wage.”
The Low Pay Commission is considering what level of rise in the national minimum wage to recommend for this year.