The Mayor of Newham has called on the government to give more powers to local authorities to act against employers not paying the national minimum wage (NMW), after research revealed that almost one in five working residents were earning less.
Sir Robin Wales spoke out on 11 April, after the statistics were revealed in independent research conducted by Ipsos MORI.
HM Revenue and Customs is responsible for enforcing the NMW but the council said that despite evidence it had presented that the law is widely flouted, only nine prosecutions had been made nationally since 2001.
Sir Robin called for investigative and enforcement powers relating to the NMW to be devolved to local authorities, alongside tougher penalties, to enable them to take direct action and prevent workers from being exploited.
He said: “Many people do not realise that there is a hidden economy operating in the UK where workers are still not receiving the National Minimum Wage. It is a disgrace that laws introduced to prevent poverty pay are so poorly monitored and enforced”.
“We’re on the side of businesses that play by the rules and we will continue to work closely with them to bring new investment to the borough”.
“Local enforcement powers would enable us to build a thriving local economy full of opportunities for our residents to get into good quality employment. However, without the national recognition that pay abuse still happens, that’s just not possible”.
At Palmers Solicitors, we can advise on all aspects of employment law, including those relating to the national minimum wage and other statutory payments. Our HR package also offers regularly updated sample policies for these issues.