To ask the Secretary of State for Business, Innovation and Skills, if he will estimate the total income lost each year to employees who are entitled to but are not paid the National Minimum Wage.
15 December 2014
There is no reliable estimate of the total income lost each year as a result of non-compliance with the National Minimum Wage.
Office for National Statistics estimates of the Annual Survey of Hours and Earnings (ASHE) show that there were 236,000 jobs with pay less than the NMW held by employees aged 16 and over in April 2014. This constituted 0.9% of UK employee jobs.
However, although it is our best measure of earnings, ASHE is not a complete measure of non-compliance as, for example, it does not account for employers making authorised deductions for accommodation.
Calculating the income lost would require more assumptions to be made about the level of underpayment for individual jobs and would be significantly less robust.
We have increased the resources available for enforcement, strengthening HMRC’s capacity to investigate complaints and target employers where the likelihood of non-compliance is highest. We have also increased the sanctions for non-compliance. Employers will face a maximum penalty of £20,000 per worker and will be publicly named and shamed. Any worker who feels they are not getting what they are due can call the Pay and Work Rights Helpline on 0800 917 2368.