According to The Chartered Institute of Personnel and Development (CIPD) - the world's largest Chartered HR and development professional body - more than 26,000 workers who were paid below the national minimum wage have received a £4 million windfall, following a clampdown by HM Revenue and Customs.

The government department has announced that it investigated 1,693 employers for allegedly breaching minimum wage rules in the 2012-13 tax year.

As a result, 708 businesses faced automatic penalty charges of up to £5,000 and 26,519 employees received an average of £300 in back pay, topping up wages that had previously been below the legal minimum rate. 

“Paying less than the minimum wage is totally unacceptable,” said Employment Minister Jo Swinson. “Whenever we find examples of businesses breaking the law we will crack down on them.”  She added that setting minimum pay rates “supports as many workers as possible without damaging their employment prospects, which is why effectively enforcing the minimum wage is critically important in making sure it stays a success”. 

HMRC said that the majority of cases involving the abuse of minimum wage rules were dealt with using “civil penalty powers”, but warned that it would take criminal action and seek prosecution for the most serious breaches.  The latest action by HMRC was welcomed by trade unions, although the TUC called on the government to go further and “name and shame” guilty firms. 

“As well as handing out fines, the government must publicly name and shame all those rogue employers who knowingly underpay their staff,” said TUC General Secretary Frances O’Grady.  “Nearly a million UK workers rely on the national minimum wage, which has become a vital lifeline. The action taken by HMRC is a welcome step but must be the beginning of a concerted campaign that also raises awareness about the right to a legal wage among those being exploited.”

The national minimum wage in the UK is £6.19 per hour for workers aged 21 and over, and this will rise to £6.31 from 1 October, 2013.  Staff aged 18-20 are currently entitled to at least £4.98 per hour, while the rate for under-18s is £3.68. Apprentices who are either under 19 years of age or in their first year of training are to be paid at least £2.65 per hour.

Image: Jo Swinson