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Why are some employers not paying their staff enough?

4 Mins

As any entrepreneur will testify, a business’ biggest asset is its workforce.

So, what baffles me is why are there still firms out there that aren’t paying their people what they are entitled to?

There is no way in 21st century Britain that a business should be run like a Victorian sweatshop where the fact that someone has a job is rewarding enough. This was supposed to change with the introduction of the minimum wage back in 1998, but some companies have persisted in not meeting their obligations more than 20 years later.

The minimum wage hasn’t helped

It led to the Government starting to name and shame firms where between 2013 and 2018, it identified more than £9 million in back pay for 67,000 workers and fined businesses a total of £6.3 million.

While some of these firms include small independent retailers, car washes and hairdressers, it also highlighted that big national businesses have also been caught out, with some like H&M, Wagamama and Marriott Hotels having their names pinned to the Department of Business’ wall of shame.

However, after March 2019 the Government appeared to go quiet leaving those breaching the rules to carry on regardless while the politicians entered the confusing and lengthy parliamentary process of reviewing its minimum wage policies.

Thankfully, just before Boris Johnson triggered his latest Cabinet merry-go-round last week with the TV news channels treating the reshuffle like football’s Transfer Deadline Day, it was announced that the naming and shaming would return from this April.

It so-called ‘naming rounds’ will be more regular and those caught out will still have to pay back workers and will face fines up to 200% of the arrears.

Does ‘naming and shaming’ really work?

That might still not be enough if there are employers who struggle to work out the right hourly rate on their calculators, two decades after the modern form of the minimum wage was introduced.

Undoubtedly, as well as being legal wrong, it is also morally out of order and has a wider impact on society by pushing people into poverty as well as making it attractive to be on benefits rather than in work.

This diverts responsibility away from businesses and places it squarely on the shoulders of the state, which is a culture that many of us have tried to reverse as employers, and UK plc, will get the greater benefit, no pun intended, from having people in jobs rather than lounging on the sofa watching Loose Women.

The Government needs to be proactive

Rogue businesses have to be held accountable for not paying the minimum wage. Unfortunately, having their names plastered all over the internet, in the digital era’s equivalent of being paraded through a village for the townsfolk to throw rotten fruit at them, does appear to be enough.

The recent review of the National Minimum Wage is, therefore, a missed opportunity by the Government to really stamp down on this practice, particularly among big businesses that really should know better.

Bigger punishments, including larger fines, have to hang over those who avoid paying the minimum wage. Their employees deserve better, as does our country’s reputation for being a modern and progressive society.

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