Barwell’s acceptance of support by a business woman who broke wage laws highlights breaches of minimum wages as an election issue. Its is estimated that over £500 million has been lost to workers across the country because firms paid below the statutory minimum rate.
Barwell backer Neelofar Khan was found to have failed to pay the minimum wage in 2010 at her Chilli Chutney business in Streatham. This highlights the non-compliance by many employers with the requirement to pay workers at least the minimum wage. The story as first reported by Inside Croydon
You can see her YouTube video explanation of why she is supporting Barwell at https://www.youtube.com/watch?v=PsuceJCD9Ms
The details of the events in 2010 can be seen at http://www.streathamguardian.co.uk/news/8448240.Businesswoman_liquidates_company_after_employment_tribunal
She was being praised just one month before she liquidated her company. http://londonist.com/2010/09/london_entrepreneurs_neelofar_khan.php
Khan was also praised last month for her business activities in Croydon: http://www.yourlocalguardian.co.uk/yoursay/schools/11104800.Local_Croydon_Entrepreneur_Shares_Her_Story
Barwell’s Government names and shames
Barwell’s outgoing Government has just named 48 employers for failing to pay their workers the national minimum wage in sectors ranging from fashion and publishing, to health and fitness and retail.
More than 200 employers have now been “named and shamed” since a new regime came into force in October 2013, with total arrears of £635,000 and penalties of almost £250,000.
They include restaurants, clothing and computer, day nurseries, hairdressers, leisure goods, media and marketing, mortgage and car repair and sales businesses, takeaways, 99p stores, pubs, a hotel, a care home, and a pharmacy. Well known names include Foot Locker, Pizza Hut and Conde Nast Publications.
For further details see
TUC general secretary Frances O’Grady said: “It’s great to see more cheapskate bosses brought to justice for not paying the minimum wage. It’s a constant battle though, and despite the growing list of those named and shamed there are many other employers still getting away with it.
“The Government should invest in more inspectors so that every single minimum wage cheat is caught.”
Newham Council wants powers to police minimum wage
Newham Council has called on the Government to allow local authorities to tackle businesses failing to pay the minimum wage. A report by the council and the GMB union says over £500 million was lost to workers across the country because firms paid below the statutory minimum rate. Almost a fifth of residents in Newham are paid below the minimum wage, at an average of over £2,200 per worker, it was estimated.
Newham argues that it is ‘already aware of companies that flout licensing, planning, trading standards and waste rules and are able to take action. With additional powers to tackle underpayment of NMW, councils could make a substantial difference to residents’ lives.’
The Newham report can be seen at http://www.newham.gov.uk/Documents/News/PayByTheRules.pdf
Tougher inspection regime
The number of inspections for compliance has fallen, from 3,643 in 2009/10 to 1,455 completed inspections in 2013/14.
The TUC argues that the NMW enforcement regime must be subject to a process of continual improvement in order to keep up with those employers who actively look for new ways to try to evade their responsibility to pay the National Minimum Wage (NMW). In a 2013 report it set out a 10-point plan for sharpening NMW enforcement during the next parliament:
- Invest an extra £1 million per year to ensure that workers know their rights
- Hire 100 more wages inspectors to crack down on employers who flout NMW law
- Produce stronger official guidance so employers know their responsibilities
- Create a legal gateway for HMRC to share information with local authorities, the Maritime and Coastguard Agency, Civil Aviation Authority and the Driver and Vehicle Services Agency where relevant
- Name and shame all employers who fail to pay the minimum wage
- Introduce a government guarantee to pay arrears when employer goes bankrupt or simply vanishes
- Prosecute the worst offenders and increase the maximum fine to £75,000
- Target enforcement on low pay areas and industries
- Enforce the minimum wage for apprentices, as underpayment is rife in this sector
- Promote collective bargaining so that potential NMW problems can be prevented at source by trade unions.
The TUC identified the following as the most vulnerable groups to less than minimum wage exploitation:
- Migrant workers
- Domestic workers
- Unpaid work – such as interns and bogus “volunteers”
- Social care workers
- Zero hours contract workers – including agency workers
- Bogus self employment
- Misuse of tied accommodation
- Salary sacrifice schemes
The full report can be seen at https://www.tuc.org.uk/sites/default/files/ImprovingNationalMinimumWag%20Enforcement.pdf
Implications for Croydon
The big question for Croydon is how many employers
are infringing the minimum wage requirements?
This is an issue the Opportunity and Fairness
Commission could usefully consider.
And the Council should consider only working with
businesses that can prove they comply with wages law.