U.K. Reports Increased Noncompliance with Minimum Wage

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By Jared Mondschein

May 18—The number of U.K. workers identified as being owed wages because of minimum wage noncompliance more than doubled in one year, increasing to 58,000 in the 2015-2016 tax year from 26,000 in the 2014-2015 tax year, the U.K. National Audit Office (NAO) said May 11 in a report.

Minimum wage noncompliance in the care sector “remains a concern,” with as much as 11 percent of workers in the sector being underpaid, the NAO report said.

The national minimum wage for employees 21 to 24 years old is 6.70 pounds ($9.79) per hour. The new national living wage of 7.20 pounds ($10.52) an hour for workers at least 25 years old took effect April 1.

Despite the increased number of employers found to be noncompliant with the minimum wage, no accurate estimate of an employer's “non-compliance with the minimum wage regulations and obtaining such as estimate has been problematic,” the NAO said. In addition, when investigations are carried out for minimum wage noncompliance, the NAO found that they can be time-consuming, with only 61 percent of cases completed within half a year.

“With the implementation of the National Living Wage, it is even more important that the government ensures its compliance programme reflects the changing risks within the labour market, and maintains its progress in ensuring all employers pay the minimum wage,” Amyas Morse, NAO Auditor General, said in an NAO announcement regarding the report. The U.K. government “needs to reduce the time it takes to investigate complaints and resolve cases,” he said.

To contact the reporter on this story: Jared Mondschein at jmondschein@bna.com

To contact the editor responsible for this story: Howard Perlman at hperlman@bna.com

For More Information

The National Audit Office report can be found at https://www.nao.org.uk/report/ensuring-employers-comply-with-national-minimum-wage-regulations/,

More information on payroll issues in the U.K. can be found in the U.K. country primer.