A report by law firm Pinsent Masons has found whistleblower reports of national minimum wage violations fell to just 2,488 for the past year, down from 2,580 in the previous 12 months – and the lowest level in four years.
Pinsent Masons said that although extensive furlough in hospitality and retail sectors during the pandemic was partly responsible for the decline in numbers, they also showed that employers were getting much better at ensuring workers were not being paid rates below the national minimum wage (NMW).
Hospitality and retail staff are among the most likely to be paid close to the minimum wage, and therefore most likely to submit a NMW complaint said Pinsent Mason.
Protect data shows furlough fraud high in hospitality and retail sectors
By contrast, at the height of the pandemic, Protect’s Advice Line was inundated with calls over furlough fraud, with many calls from the hospitality and retail sector. In fact, workplace furlough fraud made up 62% of Covid-19 cases to Protect’s Advice Line – and it was the fastest emerging issue Protect has dealt with in its 28 year-history. In 2020, a third of these calls were from the hospitality and retail sectors, compared to just 6% in 2019.
Protect Chief Executive Liz Gardiner said, “”Whilst it is good news to see a drop in whistleblowing reports on the failure to pay minimum wages, we suspect the reason may be due to the vast amounts of people being paid furlough. It is interesting the report states one of the biggest sectors to ordinarily report NMW complaints are lower paid sectors, such as hospitality and retail which pay close to the minimum wage.
“The drop in numbers may also be due to the enforcement that HMRC has in place – organisations that don’t comply with the NMW can be fined, or named and shamed. We’d like to see stronger enforcement for breaches of whistleblowing employment rights and there may be lessons to learn from this too.”