Mon, 1 Aug 2011

Cuts to HMRC will increase NMW evasion, says AM

Further cuts to HMRC could lead to more employers flouting National Minimum Wage (NMW) laws, warns a Welsh Assembly member.

Leanne Wood, AM for South Wales Central, made the comments after releasing figures showing more than 1,000 employers had not paid workers in Wales the NMW since 2002, and none had been prosecuted.

The figures, obtained through a Freedom of Information request, followed a leaked document in June that suggested six HMRC offices in Wales face closure, leaving only one in Cardiff.

As HMRC employs only eight people to enforce the NMW, Wood said losing departmental positions risked giving employers greater freedom to break the law. ‘HMRC lost many posts from 2004,’ she said. ‘That tells me enforcing minimum wage legislation is going to become more difficult. Also, the longer you’ve been at HMRC, the better your redundancy package, so people who have worked the longest are likely to apply for voluntary redundancy, and we’ll lose those with experience.’

Since legislation introduced in April 1999 made it an offence not to remunerate workers at NMW, seven employers in England have been prosecuted for noncompliance. But figures revealing how many others have flouted NMA laws without charge have not been released.

Wood suggested that naming and shaming employers that flout NMW laws would act as a deterrent. In January this year, the Department for Business, Innovation and Skills (BIS) introduced a scheme to publish the names of employers that flouted NMW criteria, but none have been named to date.

A BIS spokesman said: ‘It takes time to work through the system and investigations are still underway.’