National Minimum Wage

Chapter 4: Compliance and Operation of the National Minimum Wage
4.117 We are, like a large number of stakeholders, very concerned about the reduction in the
Government’s awareness-raising activities as a result of the marketing freeze. We understand
that BIS is doing its best to use alternative channels and we support them in their efforts to
do this. However, both BIS and our own commissioned research have shown that awareness
levels need to be raised, especially as this is one of the strands of the Government’s
compliance strategy aimed at ensuring everyone who is entitled to the minimum wage
receives it. The current budget for awareness is extremely modest (equal to around 1 per
cent of HMRC’s enforcement budget) but because of the freeze even this may not be used.
Restricting this activity is short-sighted and is likely to increase unintentional non-compliance,
which will affect both workers and employers. Therefore, we recommend that the
Government should more actively communicate both the rates themselves, and rights
and obligations under the National Minimum Wage. Communication activities about
the minimum wage should not be subject to the Government’s marketing freeze.
Conclusion
4.118 This chapter has looked at issues around simplification of the minimum wage, enforcement,
and also specific issues with regard to its operation. It has drawn heavily on the views of
stakeholders and also from our own discussions with the Government.
4.119 We have considered carefully the evidence of the Government and other consultees, and
have not identified any regulatory simplifications whose benefits would outweigh their
drawbacks. We agree with the majority of respondents to our consultation that the NMW
is a relatively simple part of the employment law framework. Stakeholders have told us that
improving the official guidance is the most important simplification measure. Some shortfalls
are in specific areas and in some fields there is now less guidance than there used to be.
It is imperative that relevant, accurate and easy to find guidance is available on the minimum
wage. We have recommended that the Government commits itself to having effective, clear
and accessible guidance in place, and first undertakes a complete review of the existing
guidance. We have highlighted a number of specific areas where improved guidance
is needed.
4.120 Good progress is being made with regard to improving the enforcement regime. Allocating
resources to risk and making better use of intelligence are moves in the right direction. It is
difficult, at present, to measure these improvements, but we have started to see increased
reporting in the media, particularly on the targeted enforcement campaigns. This is important
in raising awareness both of enforcement activity and of the minimum wage itself. But more
can be done in this area.
4.121 In addition, new policies have been put in place to penalise employers who do not comply
and also to name those who show a wilful disregard of the rules. These are important
policies, but they need to be used and also reviewed at the appropriate time. We are
disappointed by the failure to date to name any employers at all, and have recommended
that the Government should make frequent use of naming.
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