‘Skimming profits’ from workers’ pockets

Although nearly 700 firms have been fined a total ÂŁ1.4m for paying staff below the minimum wage since 2013, MPs and Unite said today (January 6) that the penalties are not enough of a deterrent to stop other employers breaking the law.

The total amount of fines – which came on top of the companies being forced to pay ÂŁ3.5m in wage arrears – was released after the government was humiliated by the revelation that not one of the firms has faced criminal proceedings for their actions.

Since February 2013 employers found not to have paid the legal minimum have been publicly shamed, as part of “crack down on those who ignore the law”. The lists have included household name brands, high street companies and major businesses.

From last year HMRC has also had the power to fine the companies up to 200 percent of the money owed and before that up to 100 per cent.

However the ÂŁ1.7m fine, which was revealed by Baron Lucy Neville-Rolfe after a parliamentary question, is only around 40 per cent of the total that has been underpaid.

Neville-Rolfe insisted that publicly shaming companies is “the most effective means” of quickly getting workers the money they are owed.

‘Rap on the knuckles’

Unite general secretary Len McCluskey said the punitive actions can only ever be a “rap on the knuckles” and that strong trade unions are needed to stamp out the problem.

“This just confirms, sadly, what we experience all too frequently every day.  Too often companies are skimming their profits out of the pockets of their workforce.  It is a continuing reminder that for too many working people, work in this country just does not pay.

“And while it is good to see the rogues being held to account in some way, these fines can only ever be a rap on the knuckles.  We will only make serious progress towards stamping out wage abuse and raising workers out of poverty when we have a solid floor beneath workers’ feet.”

McCluskey added, “That means restoring the collective bargaining arrangements that would see fairer wages negotiated and protected – and working with unions to ensure workers are paid what they deserve.

“Only serious action like this will prevent the further slide into the low waged, insecure work which is destroying living standards for millions in this country.”

On Wednesday (January 4) the government announced that it has set up a new watchdog to crack down on rogue employers.

Shadow business secretary, Clive Lewis said, “Not only is the ‘living wage’ not enough to live on, but too many employers are getting away without paying even that. Honest businesses are being undercut and honest workers are being underpaid.

“For too long ministers have been soft on hard labour. The new director (of the watchdog) must now ensure that illegal exploitation is prosecuted and punished – crime shouldn’t pay, and work should.”