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Naming and shaming
A scheme exists where employers who have underpaid the National Minimum Wage (NMW) are named. This “naming and shaming” is done with a view to deterring employers from paying less than the NMW.
Since April 2016, financial penalties can be imposed on employers where they fail to pay a Tribunal award for more than 6 weeks after the judgement was issued. This scheme encourages employers to make timely payment of employment tribunal awards. If they don’t, a penalty of between £100 and £5,000 can be imposed.
On 17 December 2018, the Department for Business, Energy and Industrial Strategy (BEIS) announced a new scheme to name employers who fail to pay employment tribunal awards. This will apply to tribunal awards registered with BEIS on or after 18 December 2018. Employers who default will be named in a quarterly press release on the gov.uk website.
The new scheme applies to Tribunal awards of £200 or more where the claimant has registered with the penalty and naming scheme. Once registered, an enforcement officer will write to the employer and advise that if the award is not paid it faces a penalty being imposed and its public naming of the default.
If the Tribunal award remains outstanding for 28 days the enforcement officer will send a penalty notice ordering the employer to pay a penalty of 50% of the original award and interest at 8% per annum. The BEIS scheme document does not specify a maximum penalty so it is not clear whether this was an oversight, whether the current £5,000 maximum penalty will apply or whether there is no limit to the penalty that can be imposed.
Employers will be sent a notice informing them that they will be named unless they submit valid representations within 14 days and that their representations are accepted. The reasons representations may be accepted are if:
- Naming carries a risk of personal harm to an individual, their family or other employees
- There are national security risks associated with naming in their case
- There are other factors which indicate it would not be in the public interest to name the employer
- The employment tribunal award has been paid in full and proof of this is submitted and verified
The employer must also provide proof or evidence in support of any of the representations it makes. If acceptable representations are not received from an employer within the 14 day period, the employer’s name will be in the next quarterly press release.