‘Let town halls name and shame pay cheat bosses’

 
2 December 2013
WEST END FINAL

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Town halls should have the power to crack down on unscrupulous bosses who refuse to pay the minimum wage, an influential report claimed today.

The Centre for London study said councils should be able to name and shame companies, impose tough financial penalties and prosecute repeat offenders.

It accused some employers of undermining the law and exploiting workers by failing to pay the £6.31 an hour minimum wage.

Union bosses said there should be “no hiding place” for employers who “cheated” workers out of their legal pay leaving them struggling to cope.

Around 300,000 workers across the UK are paid less than the minimum wage with those in London - which has a high concentration of migrant workers and low-paid sectors such as hotels and hospitality - among the worst affected.

The report revealed “systemic failure” in the way the minimum wage is currently enforced. It called for the £5,000 limit on fines for employers to be removed, all those found to be in breach publicly named and repeat offenders pursued more often for prosecution.

It also called on the Government to abolish the first-year rate for apprentices, pay carers for travel time and make it illegal to advertise unpaid internships, although voluntary roles with no set working hours would still be permitted.

In eight London boroughs - Waltham Forest, Haringey, Hackney, Ealing, Sutton, Lewisham, Newham and Bexley - five per cent of workers earn at or below the minimum wage.

Yet there has only ever been one prosecution of an employer for paying less than the minimum wage - and no companies have been named and shamed for breaches.

The report argued that enforcement of the wage was currently “excessively” centralised and powers should be partially devolved to the boroughs.

Ben Rogers, Director of the Centre for London said: “The minimum wage has helped raise the earned income of hundreds of thousands of workers since it was introduced in 1998. Employers who don’t pay it undermine the law, exploit their workers and take unfair advantage of firms that play by the rules.

“London’s boroughs are particularly well positioned to crack down on bad employers and should be given a lead role in enforcing the minimum wage.”

TUC general Frances O’Grady added: “Ensuring that all low-paid workers receive at least the minimum wage is the very least all working Londoners should expect. There must be no hiding place for employers who try to cheat workers out of a legal wage and all minimum wage cheats should face prosecution, naming and shaming as well as tough financial penalties. It is clear that far too many unscrupulous bosses are still getting away with ignoring the minimum wage.”

CASE STUDY

Eduardo, 34, a hotel cleaner, was paid £1.44 per room and could clean two or three small rooms in an hour.

“I complained many, many times and was always told that if I didn’t like it, I should go and find another job. I would be punished for complaining and given the worst rooms to clean. They had four single beds so took much longer to clean but we were paid the same rate. The hotel made a big deal out of their quality service so was lying to its clients too.

“I finally found a new job which paid the Living Wage [£8.55 an hour] and a lot of things changed. Before, I felt very powerless because I was head of the family but couldn’t support my children or my wife. So now things are looking better and I can bring my two children food and the clothes they need for school.” 

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