National Minimum Wage Legislation

Lord Sahota Excerpts

Thursday 21st March 2024 Lords Chamber

Asked by

[Lord Sahota]

To ask His Majesty’s Government what steps they are taking to improve the enforcement of national minimum wage legislation.

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Offord of Garvel) (Con)]

My Lords, the Government take enforcing the minimum wage extremely seriously. We are clear that anyone entitled to be paid the minimum wage should receive it. Robust enforcement action is taken against employers who do not pay their staff correctly. Since the introduction of the national minimum wage in 1999, the Government have overseen the repayment of more than £173 million to 1.4 million workers, issued nearly £86 million in financial penalties and completed more than 87,000 investigations.

[Lord Sahota (Lab)]

I thank the Minister. The International Labour Organization recommends that there should be one inspector for every 10,000 workers to check that employees are being paid the minimum wage. The UK ratio is 0.4% for every 10,000 workers; that way, UK employers can expect an inspection every 500 years. That is not good enough. You only have to talk to overseas students and workers in minority communities to see how widespread the problem is. In order to stop paying the minimum wage to some employees, employers make them work 20 hours, but on the books they are paying them for only 10 hours—this is one way they get round it. We need stronger and tougher sanctions against rogue employers, so we can get on with it.

[Lord Offord of Garvel (Con)]

The Government remain totally committed to the effective enforcement of employment rights and provide a lot of funding, including over £35 million this year to the existing dedicated labour market enforcement bodies. That is a 121% increase in funding since 2010, so a lot of money has gone into this area. On top of that, we provide funding of over £50 million per annum to ACAS, to support employment tribunals. We have had great success in reducing the number of companies not paying the national minimum wage.