[UK] Shockingly few companies prosecuted in 15 years for failure to pay minimum wage

In the UK, new figures have revealed that a shockingly low number of companies have been prosecuted for not paying the minimum wage in 15 years, MSN reports.

According to experts, the small numbers “emboldened” rogue employers who pay workers far less than they are due.

Ministers have reportedly been warned to take control of the problem, in the wake of claims it is hampering economic growth and increasing the burgeoning welfare bill.

Official figures from the Department for Business and Trade show that between 2008 and 2023, only 21 employers were successfully prosecuted for underpaying the minimum wage, with an additional employer accepting a caution.

Ministers argue that criminal prosecution is reserved for the most serious cases, which involve deliberate underpayment or reckless pay practices. Such prosecutions usually occur where there is a wider public interest, or where employers are persistently non-compliant or refuse to cooperate with HMRC, they claim.

In 2024, 524 businesses were “named and shamed” for failing to pay the minimum wage, with more than 172,000 workers left short. The businesses in question were ordered to repay workers nearly £16m, plus an additional financial penalty.

However, Labour peer Lord Sikka - emeritus professor of accounting at the University of Essex - reportedly described those punishments as “puny” and called for further companies to be prosecuted.

The prosecution figures were revealed by Minister Baroness Jones of Whitchurch in response to a question from Lord Sikka.

Speaking to The Independent, Lord Sikka said, “Our enforcement is incredibly weak.

“I think this is part of the British disease, where the law is not really enforced, because they do not employ enough enforcers. It really then emboldens rogue employers because they can then game the system. And, every year, hundreds of thousands of workers are denied the minimum wage.”

He reportedly called for more prosecutions, stating that the penalty for not paying the minimum wage “should at least equal the remuneration of the company board. The larger the company, the bigger the penalty”.

Lord Sikka added that a failure to pay the minimum wage, brought in by former Prime Minister Sir Tony Blair, has an impact “at many levels of the economy. It could boost growth and reduce the welfare budget – if people are earning more, they have to claim less welfare.”

Source: MSN

(Quotes via original reporting)

In the UK, new figures have revealed that a shockingly low number of companies have been prosecuted for not paying the minimum wage in 15 years, MSN reports.

According to experts, the small numbers “emboldened” rogue employers who pay workers far less than they are due.

Ministers have reportedly been warned to take control of the problem, in the wake of claims it is hampering economic growth and increasing the burgeoning welfare bill.

Official figures from the Department for Business and Trade show that between 2008 and 2023, only 21 employers were successfully prosecuted for underpaying the minimum wage, with an additional employer accepting a caution.

Ministers argue that criminal prosecution is reserved for the most serious cases, which involve deliberate underpayment or reckless pay practices. Such prosecutions usually occur where there is a wider public interest, or where employers are persistently non-compliant or refuse to cooperate with HMRC, they claim.

In 2024, 524 businesses were “named and shamed” for failing to pay the minimum wage, with more than 172,000 workers left short. The businesses in question were ordered to repay workers nearly £16m, plus an additional financial penalty.

However, Labour peer Lord Sikka - emeritus professor of accounting at the University of Essex - reportedly described those punishments as “puny” and called for further companies to be prosecuted.

The prosecution figures were revealed by Minister Baroness Jones of Whitchurch in response to a question from Lord Sikka.

Speaking to The Independent, Lord Sikka said, “Our enforcement is incredibly weak.

“I think this is part of the British disease, where the law is not really enforced, because they do not employ enough enforcers. It really then emboldens rogue employers because they can then game the system. And, every year, hundreds of thousands of workers are denied the minimum wage.”

He reportedly called for more prosecutions, stating that the penalty for not paying the minimum wage “should at least equal the remuneration of the company board. The larger the company, the bigger the penalty”.

Lord Sikka added that a failure to pay the minimum wage, brought in by former Prime Minister Sir Tony Blair, has an impact “at many levels of the economy. It could boost growth and reduce the welfare budget – if people are earning more, they have to claim less welfare.”

Source: MSN

(Quotes via original reporting)