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<p>HMRC may open an investigation into an employer’s compliance with National Minimum
Wage law either following a worker complaint or via proactive risk-based enforcement
activity. Where HMRC find no minimum wage arrears are due, they will not take enforcement
action such as issuing a Notice of Underpayment and financial penalty.</p><p> </p><p>Where
HMRC find that arrears are due to workers they will generally issue a Notice of Underpayment
and financial penalty. In some cases, employers may be allowed to carry out self-correction
action which ensures that workers are paid the money due to them without the issue
of a Notice of Underpayment. Overall, in 2018/19 HMRC found arrears in 45% of cases
they closed; this “strike rate” has increased year-on year since the introduction
of the National Living Wage in 2016.</p><p> </p><p>This information will be covered
in more detail in BEIS’ Minimum Wage Enforcement and Compliance report, which we will
publish in due course.</p>
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