Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to the recommendations in the Low Pay Commission's May 2020 report, Non-compliance and enforcement of the National Minimum Wage, what steps he has taken to (a) evaluate what data are recorded in non-compliance investigations, (b) make an assessment of how that data can be used to improve cost-effectiveness, (c) monitor the effect of the increase in the threshold for naming employers found to have underpaid workers, (d) take responsibility for the delivery of the new higher NLW target in the sectors where it is the main source of funding, (e) use targeted communications to both apprentices and their employers to highlight underpayment risks and the non-payment of training hours, (f) instruct HMRC to (i) review how it records apprentice underpayment, (ii) publish the number and profile of the apprentices identified as having been underpaid and (iii)) review its approach to investigations involving apprentices and whether such investigations would identify non-payment of training hours and (g) review the regulations on records to be kept by an employer to set out the minimum requirements needed to keep sufficient records; and if he will make a statement.

The Government is committed to tackling minimum wage non-compliance. Anyone entitled to be paid the National Minimum Wage (NMW) should receive it. The last financial year (2019/20) was another strong year for NMW enforcement. HMRC completed over 3,300 investigations and found arrears in just over 1,200 of them. They identified £20.8 million in arrears for over 263,000 workers and issued just under 1,000 penalties, totalling £18.5 million to non-compliant employers.

We have noted the Low Pay Commission’s (LPC) recommendations made in their 2020 report on non-compliance and enforcement of the NMW. We responded to the LPC’s last (2019) set of enforcement recommendations in the 2018/19 edition of BEIS’ annual report on NMW Enforcement and Compliance[1].

We have already acted on the recommendations made by the LPC following the publication of their report in May 2020. We have drawn up plans for evaluative work across the 2020-21 financial year, started research to assess the impact of HMRC’s promote activity and engaged with both the Department for Education and HMRC to tackle the underpayment of apprentices. We will respond in full to the LPC’s 2020 enforcement recommendations in due course. We will also provide more detailed statistics on enforcement in 2019/20 as part of the 2019/20 edition of BEIS’ annual report on NMW Enforcement and Compliance.

[1] National Living Wage and National Minimum Wage: Government evidence on compliance and enforcement, 2019 (BEIS, 2020)