National Minimum Wage

Chapter 4: Compliance and Operation of the National Minimum Wage
4.107 Historically, the Government’s performance on enforcement has been measured in terms of
outputs: namely, the number of cases closed; the number of workers for which arrears are
identified; and the total amount of arrears. These measures have given a good indication of
year-on-year activity carried out and associated results. But they do not tell us whether or not
the Government is moving towards its stated goal of ensuring that everyone who is entitled
to the minimum wage receives it. The Government is, therefore, considering how it can
refine the way it measures what it does to take account of the outcomes it is trying to
achieve, and our Secretariat will contribute to this process.
Resources
4.108 In our 2011 Report we expressed our disappointment that the Government declined to
commit to maintain funding in real terms for monitoring and enforcement, as we had
recommended in our 2010 Report. We raised concerns last year that the freeze on marketing
expenditure and widespread cuts across government may reduce the enforcement budget
and that enforcement activities would suffer as a result. The Commission therefore strongly
urged the Government to maintain the existing levels of funding for enforcement activities.
4.109 In evidence, GMB said it was important to maintain
the current funding for enforcement activities. The
“Every year employers develop
Public and Commercial Services Union (which
new ways of trying to avoid
represents Compliance Officers) said the funding and the minimum wage rules so
resources for enforcement, and prosecutions, needed constant vigilance is needed.”
to be increased to send a stronger message to
TUC evidence
employers who try to evade the law. It said
compliance teams were only scratching the surface of
parts of the economy where workers were afraid or
unable to complain. The TUC said there was a close relationship between the resources
available for enforcement and the quality of enforcement. It therefore wanted to see the
budget for enforcement increased. Unite also wanted to see real term increases in funding
for enforcement. The Business Services Association encouraged ongoing vigilance and
high-level enforcement efforts.
4.110 The Government has advised that HMRC’s enforcement budget for 2011/12 was £8.2m,
an increase of 2.4 per cent on 2010/11. Although less than inflation this increase is welcome,
bearing in mind the budget cuts taking place elsewhere. We will continue to monitor the
budget situation in subsequent years and report as appropriate.
Awareness
4.111 Widespread awareness of the minimum wage is a pre-requisite for maximising compliance.
It is, therefore, imperative that the minimum wage rules are widely publicised and not just at
the time of any change in the minimum wage rates. Prior to 2010, the then Government had
put an increased emphasis on its awareness-raising activities and had undertaken a number
of specific campaigns targeting particular groups, for example migrant workers. We have
reported previously on the good work done in this area.
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