Gavin Howe
In the UK, the government's National Minimum Wage policies and labour market enforcement programme are underpinned by criminal offences. If an employer breaks the minimum wage law, they will be issued with a formal notice by HMRC, which sets out the arrears of minimum wage to be repaid by the employer, along with a penalty for non-compliance. In some cases, criminal prosecutions may be pursued, and civil enforcement action may be taken in parallel to ensure that workers are repaid what they are owed. In the US, the state of Georgia has a law that stipulates that if an employer pays an employee less than the minimum wage, the employee has the right to file a civil action in a superior court within three years to recover the difference between the amount paid and the minimum wage.
| Characteristics | Values |
|---|---|
| Who enforces the law? | HMRC |
| Who can be held accountable? | Employers |
| What happens if an employer breaks the law? | They will be issued with an NoU, a formal notice that sets out the arrears of minimum wage to be repaid by the employer together with the penalty for non-compliance. |
| What happens if an employee is paid less than minimum wage? | They have the right to file a civil action in a superior court within three years to recover the difference between the amount paid and the minimum wage. They may also receive an additional amount equal to the original claim as liquidated damages, along with costs and reasonable attorney’s fees determined by the court. |
| What is the objective of the naming scheme? | To raise awareness of minimum wage enforcement and deter employers who would otherwise be tempted to break minimum wage law. |
| What happens if the criminal proceedings do not result in arrears being paid to workers? | Civil enforcement action may be pursued in parallel to criminal proceedings to ensure that workers are repaid what is lawfully owed to them. |
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What You'll Learn
Criminal proceedings and prosecutions
When an employer breaks minimum wage law, they will typically be issued with a Notice of Underpayment (NoU) by HMRC. This formal notice sets out the arrears of minimum wage owed to workers, along with any penalties for non-compliance. HMRC enforcement teams have the power to conduct criminal investigations into suspected offences under the 1998 Act and will refer suitable cases for prosecution by the Crown Prosecution Service (CPS).
However, it is important to note that criminal prosecutions may not always result in workers being repaid the arrears they are owed. Therefore, civil enforcement action may be pursued in parallel to criminal proceedings to ensure that workers receive the money they are lawfully entitled to. Each case will be considered on its own merits, taking into account the evidential and public interest stages of the Code for Crown Prosecutors.
In addition to criminal proceedings, the government has introduced a naming scheme to deter employers from breaking minimum wage laws. This scheme, which came into effect in January 2011, involves publicly naming employers who have been found to breach minimum wage laws. The objective is to raise awareness of minimum wage enforcement and encourage workers who have been underpaid to come forward. It is also recognised that some employers may be more responsive to social and economic sanctions than financial deterrents alone.
Employees who believe they have been paid less than the minimum wage also have the right to take civil action in a superior court to recover the difference between the amount paid and the minimum wage. They may also be entitled to additional damages, costs, and reasonable attorney's fees as determined by the court.
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Civil enforcement action
An employer that breaks minimum wage law will be issued with an NoU by HMRC. This is a formal notice that sets out the arrears of minimum wage to be repaid by the employer together with the penalty for non-compliance with the requirement to pay workers the minimum wage. An information sheet is given to the employer at the start of the investigation which sets out details about the DBT naming scheme. HMRC will refer the employer to DBT for naming after the HMRC case closure letter has been issued to the employer. DBT considers all cases for naming where the total arrears owed to workers was £500 or more.
In October 2010, the government announced a new scheme to name employers who break minimum wage law. The naming scheme came into effect on 1 January 2011. The objective of the naming scheme is to raise awareness of minimum wage enforcement and deter employers who would otherwise be tempted to break minimum wage law. The government recognises that some employers are more likely to respond to the social and economic sanctions that may flow from details of their payment practices being made public, than from financial deterrents.
In the US state of Georgia, if an employer pays an employee less than the minimum wage, the employee has the right to file a civil action in a superior court within three years to recover the difference between the amount paid and the minimum wage. Additionally, the employee may receive an additional amount equal to the original claim as liquidated damages, along with costs and reasonable attorney’s fees determined by the court.
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Naming and shaming employers
In the UK, an employer that breaks minimum wage law will be issued with a Notice of Underpayment (NoU) by HMRC. This is a formal notice that sets out the arrears of minimum wage to be repaid by the employer, together with the penalty for non-compliance. HMRC enforcement teams are invested with powers that enable them to conduct criminal investigations into suspected offences under the 1998 Act.
In October 2010, the government announced a new scheme to name employers who break minimum wage law. The naming scheme came into effect on 1 January 2011. The objective of the naming scheme is to raise awareness of minimum wage enforcement and deter employers who would otherwise be tempted to break minimum wage law. The government recognises that some employers are more likely to respond to the social and economic sanctions that may flow from details of their payment practices being made public, than from financial deterrents.
In the US, if an employer pays an employee less than the minimum wage, the employee has the right to file a civil action in a superior court within three years to recover the difference between the amount paid and the minimum wage. Additionally, the employee may receive an additional amount equal to the original claim as liquidated damages, along with costs and reasonable attorney’s fees determined by the court.
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HMRC investigations
In addition to HMRC investigations, the government has also introduced a naming scheme, which came into effect on 1 January 2011. This scheme aims to raise awareness of minimum wage enforcement and deter employers from breaking the law by making details of their payment practices public. The government recognises that some employers may be more responsive to social and economic sanctions than financial deterrents. The naming scheme also encourages workers who have been underpaid to come forward.
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Employee civil action
Employees who have been underpaid have the right to file a civil action in a superior court within three years to recover the difference between the amount paid and the minimum wage. Employees may also receive an additional amount equal to the original claim as liquidated damages, along with costs and reasonable attorney’s fees determined by the court.
In the UK, the government has a policy of naming employers who break minimum wage law. The naming scheme came into effect on 1 January 2011. The objective of the naming scheme is to raise awareness of minimum wage enforcement and deter employers who would otherwise be tempted to break minimum wage law. The government recognises that some employers are more likely to respond to the social and economic sanctions that may flow from details of their payment practices being made public, than from financial deterrents.
HMRC will issue an employer that breaks minimum wage law with an NoU. This is a formal notice that sets out the arrears of minimum wage to be repaid by the employer together with the penalty for non-compliance with the requirement to pay workers the minimum wage. HMRC enforcement teams are invested with powers that enable them to conduct criminal investigations into suspected offences under the 1998 Act. Criminal prosecutions will not necessarily result in arrears being paid to workers so civil enforcement action may be pursued in parallel to criminal proceedings to ensure that workers are repaid what is lawfully owed to them.
Section 31 of the 1998 Act makes provision for criminal proceedings to be brought for a number of offences covering a range of misconduct. These criminal offences underpin the government’s National Minimum Wage policies and labour market enforcement programme.
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Frequently asked questions
The government. In the UK, the HMRC will issue a formal notice to the employer, which sets out the arrears of minimum wage to be repaid by the employer, along with a penalty for non-compliance. In the US, the employee has the right to file a civil action in a superior court within three years to recover the difference between the amount paid and the minimum wage.
In the UK, the government has the power to launch criminal investigations against employers who break the law, with a view to prosecution by the Crown Prosecution Service (CPS). In the US, the employer must make up the difference between the amount paid and the minimum wage. The employee may also receive an additional amount equal to the original claim as liquidated damages, along with costs and reasonable attorney's fees determined by the court.
To ensure that workers are paid a fair and reasonable amount for their work. The law also aims to deter employers from underpaying their workers and to encourage workers who have been underpaid to come forward.
