Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to ensure that (a) companies pay their employees the minimum wage and that (b) police forces are able to enforce related legal standards.

The Government is determined that everyone who is entitled to the National Minimum Wage (NMW) receives it. HMRC enforce the NMW and the National Living Wage (NLW) on behalf of the Department for Business, Energy and Industrial Strategy.

All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff, and HMRC won’t hesitate to take action to ensure that workers receive what they are legally entitled to and continue to crack down on employers who ignore the law. Since 2015 HMRC has secured over £115 million for more than 1.1 million workers.

HMRC considers all complaints from workers. If anyone thinks they are not receiving at least the minimum wage, they can contact Acas, in confidence, on: 0300 123 1100, or report their employer online here: www.gov.uk/minimum-wage-complaint.

Consequences for not complying with paying NMW can include fines of 200 per cent of the arrears, public naming and, for the most serious offences, criminal prosecution.

As well as investigating worker complaints HMRC also undertake proactive investigations (referred to as targeted enforcement) based on the identification of the risk of non-compliance with NMW legislation.

In addition to enforcement, HMRC also deliver a programme of education and upstream ‘Promote’ work designed to help businesses understand their obligations and encourage them to comply. This involves a range of activities to increase both employers’ and workers’ understanding of NMW rules including one-to-many letters, webinars, podcasts, and media campaigns.

Breaches of NMW legislation are normally a civil matter, but HMRC will refer the most serious cases to the Crown Prosecution Service (CPS) where HMRC identify an offence under Section 31 of the National Minimum Wage Act 1998 involving obstruction, falsifying of documents, or wilful failure to pay workers the minimum wage.

HMRC may also refer NMW offences to the CPS for prosecution that form part of a pattern of suspected or potential criminality, for example, suspected tax fraud, or wider offences such as employing illegal workers.

However, prosecutions can cause delays in recovering arrears for workers and do not necessarily guarantee payment, and consequently, prosecution is reserved for the most serious non-compliance and is not necessarily the right approach in most cases.

HMRC continues to work with other agencies, including the police, on joint operations to tackle NMW underpayment, and other labour market risks, such as illegal working and modern slavery, for which those agencies are responsible.