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HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
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Enforcement & Proceedings: Actions linked with enforcement: naming

General

The Department of Business, Innovation & Skills (NMWM02020) operate a policy for publicly naming employers who failed to comply with their national minimum wage obligations. The objective of the policy is to raise awareness of the enforcement of national minimum wage and deter those employers who might otherwise be tempted to break the law.

The policy is supported by a naming scheme which applies whenever a NMW Officer issues a notice of underpayment (NMWM13030).

Where an employer submits an appeal against a notice of underpayment (NMWM15030) the naming scheme will be considered when the appeal is concluded and the employer is unsuccessful.

Naming scheme: 1 January 2011 to 30 September 2013

The initial naming scheme applies to those cases where a national minimum wage investigation commenced from 1 January 2011 to 30 September 2013. In this scheme, cases are referred to the Department of Business, Innovation & Skills to consider naming if the total arrears owed to workers are at least £2,000, the average arrears per worker are at least £500 and where any of the following criteria are met;

  • there is evidence that the employer knowingly or deliberately failed to comply with their obligations
  • there is evidence that the employer has previously received advice from HM Revenue & Customs (NMWM02030) about the steps they need to take to ensure future compliance with national minimum wage and has not taken those steps
  • there is evidence that the employer has failed to take adequate steps to keep or preserve records
  • there is evidence that the employer has delayed or obstructed a NMW Officer in the performance of their duties
  • there is evidence that the employer has refused or neglected to answer questions put to them by a NMW Officer
  • there is evidence that the employer has refused or neglected to provide information or produce documents to a NMW Officer
  • there is evidence that the employer refused or neglected to pay arrears to workers, following receipt of the notice of underpayment which has resulted in further legal action to take place (NMWM15100).

Naming scheme: from 1 October 2013

A revised naming scheme applies to all cases where a national minimum wage investigation commenced on or after 1 October 2013. In the revised scheme, every employer which is issued with a notice of underpayment is referred to the Department of Business, Innovation & Skills to consider for naming. There are no monetary or other criteria attached to the revised scheme.

On completion of the investigation, if the employer does not appeal or if an appeal has been unsuccessful, the employer will be issued with a closure letter advising them that the investigation is complete and;

  • arrears have been paid to workers, or
  • arrears remain outstanding and the matter is being passed to solicitors for enforcement.

The closure letter will also advise the employer that they are being referred for naming and the employer will have 14 days from the date of the closure letter to make written representations, supported by evidence, to the Department of Business, Innovation & Skills, if they consider they fall within the exceptional circumstance where naming is not appropriate.

The exceptional circumstances are:

  • Naming carries a risk of personal harm to an individual or their family.
  • There are national security risks associated with naming in this instance.
  • Other factors which suggest that it would not be in the public interest to name the employer.

If the Department of Business, Innovation & Skills;

  • is satisfied that the employer should not be named, no further action with regard to naming will be taken and the employer will be notified accordingly.
  • does not accept the representation made by the employer or do not receive such representations within 14 days of the case closure letter, they will automatically name the employer under the scheme via a press notice.

In either case, the employer will still be liable and expected to pay any outstanding arrears to workers and penalty to the Secretary of State if they wish to avoid further enforcement action using civil proceedings (NMWM15100).

Full details of the policy and naming schemes are contained in the paper “Policy on HM Revenue & Customs enforcement, prosecutions and naming employers who flout NMW law”, available on the website and the associated procedural guidance can be found in the Information Centre.