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Scrooge bosses

13 September 2002 - DTI enforcers have discovered £10 million of wages unpaid by scrooge bosses since the minimum wage was introduced. The third National Minimum Wage annual report also confirms that compliance officers are effectively identifying cases and investigating complaints and that enforcement of the minimum wage is working well.

Employment Relations Minister, Alan Johnson commented:

'The minimum wage is a great success story. The Government is committed to making work pay and the National Minimum Wage, alongside Working Tax Credits and the New Deal, is key to tackling poverty.

'I am delighted that the vast majority of employers are complying with the minimum wage. Awareness of the minimum wage is high and the enforcement system is working well when workers are not receiving the pay they deserve.

'But success has not made us complacent. Substantial extra funds are going into enforcement, we have twenty more compliance officers and the number of enforcement teams around the UK has been increased from 14 to 16'.

TUC General Secretary, John Monks said:

'The recovery of £10million in illegally withheld wages is great news for fairness at work.

'More could be achieved with a even more proactive enforcement regime and less reliance on vulnerable workers reporting their bad bosses.

'Working in partnership with the Government, we want to stop scrooge bosses and put an end to exploitation. There is no room in the modern British economy for employers who flout the law in the name of cost cutting and profiteering.

Key findings of the report (covering the period April 2001 to April 2002) are:

- more than £5 million in wage arrears were identified in the year. The total amount identified since the minimum wage was introduced in April 1999 is now well over £10 million;

- 36% of employers investigated were found not to be paying the minimum wage. This represents a 6% increase on 2001/02 and a 16% increase on 1999/00 and demonstrates improved efficiency in targeting non-payment;

- the average arrears identified per worker was £495, compared with £418 in 2000/01 and £205 in 1999/2000;

- the regions with the highest number of complaints were the North West (207) and Yorkshire and Humberside (180) - please see tables at end for regional breakdowns;

- the sector with the highest number of complaints (296) was market services (which includes car and other repairs, taxi firms and communications) followed by hospitality (227);

- usage of the minimum wage interactive website www.tiger.gov.uk increased by over 70%. Each month more than 4,000 people visited the site; and

- more than 79,000 enquiries were received by the minimum wage helpline on 0845 6000 678. Over 94% of calls were answered within 15 seconds. Since 1 April 1999 the helpline has responded to more that 275,000 enquiries and handled over 7,500 complaints about non-payment of the minimum wage.

Recent cases where workers have received wage arrears include:

- A worker employed by one of the top 100 blue chip construction companies complained to the helpline that he had not been paid the minimum wage. The compliance officer established that the company had misunderstood the rules for apprentices and accepted that arrears of wages were due. 186 workers benefited from total arrears identified of more than £130,000.

- A worker complained that he and his colleagues were not being paid the minimum wage. All were residential officers at a city University who lived on campus, but although provided with free accommodation they were not paid any wage. Arrears totalling £137,000 were identified for 27 workers.

- In a case involving homeworkers the employer contended that the workers were self-employed and therefore not subject to the minimum wage legislation. An Employment Tribunal decided in favour of the homeworkers. Over £15,000 in arrears was secured for 23 workers.

- Information received from a third party suggested that a bus company had not been paying its drivers the minimum wage. The claim was investigated and enquiries revealed that 14 drivers had been underpaid. Over £5,000 in wages arrears was identified.

- Six workers who had been employed as sales representatives for a building hardware retailer complained that they had not been paid for all the hours they worked. The employer was not able to produce any records of pay for hours worked and was keen to pay the arrears identified without recourse to an employment tribunal. Arrears totalling £7,477 were identified for the 6 workers.

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