This week, the Department for Business and Trade (DBT) published a report outlining the enforcement of the national minimum wage (NMW) and national living wage (NLW) during the 2021-22 financial year. £16.3 million in arrears was identified for over 120,000 workers. 

As a result, HMRC issued nearly 700 penalties, totalling £13.2 million. The latest releases of HMRC's naming scheme saw 399 employers "named and shamed" for £3.3 million in wage arrears owed to 46,000 workers. 

 

The report notes that the first half of the 2021-22 financial year coincided with the phasing out of COVID-19 restrictions, which continued to have a significant impact on some employers' business activities, worker complaints and HMRC investigations. It was noted that there was significant employer reluctance to engage with HMRC during a time of uncertainty and hardship. However, an important part of HMRC's work in 2021-22 was the introduction of the Geographical Compliance Approach (GCA) to facilitate the compliance of willing employers by providing support and education.

Finally, whereas almost all cases of non-compliance are dealt with by way of penalties (and orders that the shortfall in NMW or NLW be paid),  HMRC remain open to criminal prosecutions where they consider the default is "deliberate and persistent", which amounts to fraudulent activity.  18 employers have been successfully prosecuted in the criminal courts, the report cites, with the most recent prosecution concluding in February 2022.