National Minimum Wage

National Minimum Wage
4.104 Figure 4.1 shows that since 2006/07, the average arrears per case have increased, apart from
in 2010/11, when there was a slight decrease on the previous year. During the same period,
the number of complaints has fluctuated, as has the total number of cases of noncompliance.
In 2010/11 the total number of complaints was only slightly higher than it had
been in 2001/02.
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Figure 4.1: Complaints and Cases of Non-compliance and Average Arrears per Worker,
UK, 2001-2011
Complaints and cases of non-compliance (number)
and average arrears per case (£)
6,000
5,000
4,000
3,000
2,000
1,000
0
2001/02
2002/03
Source: HMRC, UK, 2001-2011.
2003/04
2004/05
2005/06
Year
Complaints of underpayment (LHS) Cases of non-compliance (LHS)
2006/07
Average arrears per case (LHS) Total value of underpayments (RHS)
4.105 The number of enquiries completed each year has been decreasing since 2007/08. In the
2011 Report we said that this was likely to be as a result of the introduction of the penalties
and fair arrears regime (April 2009), as Compliance Officers had to familiarise themselves
with the new process and approach to enforcement. The statistics show that over the last
four years the number of complaints of non-compliance has fallen. At the same time, the
average number of workers per case of non-compliance has steadily increased, but the total
number of workers for which arrears have been identified has fluctuated, between 19,000
and 23,000.
4.106 It is possible to draw different interpretations from these statistics. We recognise that
progress has been made in the way enforcement is carried out, for example targeted
enforcement, allocating resources to risk, and the introduction of the Pay and Work Rights
Helpline (PWRH). But the reduction in the recorded cases of non-compliance does not
necessarily mean compliance has improved. Complaint numbers will be influenced by,
among other things, levels of awareness of how to make a complaint and preparedness to
do so (which may be affected by concerns about job security in a tougher labour market).
As already stated, we have commissioned research as part of our next report to increase our
understanding as to the actual extent of non-compliance.
2007/08
2008/09
2009/10
2010/11
6
5
4
3
2
1
0
Value of underpayments (£ million)