Deluge of complaints on minimum wage abuse

REVENUE & CUSTOMS has conducted nearly 45,000 investigations into employers paying less than the minimum wage since the legislation was introduced in 1999 – but has started only one criminal prosecution to date.

The department has received 19,000 complaints from the public about abuses of the legislation, a parliamentary answer revealed last week.

After a surge in complaints following the introduction of the minimum-wage legislation by Labour in 1999 – there were 4,682 in 1999 – the number has settled down to about 2,000 a year, the figures provided to parliament show.

The legislation gave Revenue & Customs powers to bring criminal proceedings against offenders.

The first such prosecution, against a children’s nursery, is expected to be heard at Waltham Forest magistrates court this summer. Several other prosecutions are expected to follow.

The government has been content for compliance officers to rely on the use of civil powers to date,” a department spokeswoman said.

“It is clear that these have very largely proved sufficient and that the great majority of employers agree to pay arrears without the need for an enforcement notice.

The issue has returned to the spotlight in recent weeks because of repeated reports of migrant workers being paid less than the minimum, or having allowances deducted from their pay that take them below the low-pay threshold.

Lord Hylton, the peer who asked the question, said there was “a certain amount of evidence that migrant workers are being exploited”.

One of the most high-profile minimum-wage cases was settled earlier this year after Butlins workers received more than £1m in back pay.

Although they were receiving more than the minimum wage, a deduction by their employer to pay for electricity if they lived on site took them below the threshold.