National Minimum Wage

Naming
Chapter 4: Compliance and Operation of the National Minimum Wage
urge the Government to set a date by which it will have undertaken a full review of the fair
arrears and penalties provisions.
4.89 We have long maintained that those who show a wilful disregard for the minimum wage
should be named and shamed. In 2009, the Government accepted the Commission’s
recommendation that a name and shame policy should be put in place. The criteria for
naming are based on offences in the NMW Act and, following a positive response to its
consultation, the new policy was implemented on 1 January 2011.
4.90 The Government’s stated objective for this new policy was to raise the profile of minimum
wage enforcement and to act as a deterrent to other employers who may be tempted to flout
the law. The criteria that would be used had been framed to focus on employers where the
breach was serious and appeared to be deliberate. BIS is responsible for naming the
employer under this scheme but its decision is based on information obtained by HMRC
during the course of its investigations. The employer would be named through national and
regional press notices.
4.91 In written evidence, GMB said it was concerned that despite this new policy, there had been
little change and that the criteria for naming meant that not many employers were identified.
NHF said naming could devastate a business, and this would be undeserved especially if it
transpired it was as the result of a genuine error. During our visits around the UK we have
found general support for the policy, although some employer representatives raised
concerns over too heavy handed an approach and about those making genuine mistakes
being named and shamed. There was, however, support for a strong enforcement regime.
4.92 Research undertaken by BIS (2011d) on employers’ attitudes towards compliance with the
minimum wage found that naming employers who flout the NMW law was seen to be a
good thing. Employers said that it would show the NMW legislation was taken seriously by
the Government as it could result in severe consequences.
4.93 When the introduction of this policy was announced in October 2010, the Employment
Minister said “bad publicity can be a powerful weapon.…their [employers] reputation can be
badly damaged if they are seen to be flouting the law.” The Government has advised that by
December 2011, seven cases had been referred by HMRC to BIS for consideration of
naming. But to date, no employers have been named. During a meeting with BIS and HMRC
in the autumn, we raised our concerns that nearly a year on, no employer had yet been
named. In our 2011 report we said it was too early to tell whether the criteria for naming
have been set too tightly. It would appear that they have been. We also questioned, at our
meeting with BIS and HMRC, whether BIS should be responsible for naming. Functions like
this are not part of its core activities and we wonder whether the necessary priority and
organisational competence are present. HMRC, which is more oriented to performance of
this sort of task, may be better placed to make naming work.
4.94 The Commission agrees with the Government’s objective and welcomed the introduction of
the naming policy in January 2011. It is very disappointing that, although there are still in
excess of 1,000 employers found not to be paying the minimum wage each year, no one has
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