National Minimum Wage underpayment reports have increased

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The number of complaints of suspected National Minimum Wage (NMW) underpayments received by HM Revenue and Customs (HMRC) has more than doubled in a year, according to figures obtained by Pinsent Masons, the law firm behind Out-Law.com.

According to tax investigations expert Paul Noble of Pinsent Masons, the sharp increase in reports made by whistleblowers to HMRC and Acas may be due to a rapid rise in the number of workers falling within the scope of the NMW, as well as the introduction of a new online complaints process making it easier to raise concerns,

HMRC received 5,053 reports of suspected underpayments during the year to 31 March 2017, up from 2,513 the previous year. The National Living Wage, introduced in 2016, raised pay from £6.70 to £7.20 per hour, and then £7.50 per hour last year, for workers aged 25 or over. At the same time, the number of workers covered has increased from one million to 1.6 million.

“This is a significant rise in whistle-blowing over the national minimum wage in just one year,” said Noble. “Employees are now increasingly knowledgeable about their rights, and they’re ready to take action if they don’t think they’re being paid correctly for their time.”

The government has committed £25.3 million for minimum wage enforcement in 2017/18 and launched a £1.7m awareness campaign for workers earlier this year. Employers found to have been underpaying workers face penalties of up to 200% of the arrears owed, up to a cap of £20,000 per worker.

Read more from Pinsent Masons.

Source: The Chartered Institute for Payroll Professionals (CIPP)

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