The scheme whereby the names of employers who breach National Minimum Wage (NMW) legislation are published by the Department for Business, Innovation and Skills (BIS) came into effect on 1 January 2011. The aims of the scheme are to deter employers who would otherwise be tempted to flout the law and to raise awareness of NMW enforcement in order to encourage more workers who are being paid less than the NMW to come forward.

The criteria for naming are not the same as those for prosecution. An employer will not be named under the scheme whilst prosecution proceedings are ongoing or are being considered. Where the Crown Prosecution Service rejects a potential case, the employer may still be named where the criteria for so doing are met. Employers that are successfully prosecuted will be named immediately.

HM Revenue and Customs (HMRC) will refer cases to BIS where a Notice of Underpayment has been issued to the employer and there is evidence that one or more of the following criteria are met:

• the employer knowingly or deliberately failed to comply with their NMW obligations;
• the employer has previously received advice from HMRC about the steps they need to take to ensure future compliance with NMW legislation and has not taken those steps;
• the employer has failed to take adequate steps to keep or preserve NMW records;
• the employer has delayed or obstructed a NMW compliance officer in the performance of their duties;
• the employer has refused or neglected to answer questions put to them by a NMW compliance officer;
• the employer has refused or neglected to provide information or produce documents to a NMW compliance officer; or
• the employer refused or neglected to pay arrears of the NMW to workers, following HMRC intervention, which has resulted in HMRC taking action against the employer to ensure payment of arrears to workers.

HMRC will only refer cases to BIS where the total amount of NMW arrears owed to workers is at least £2,000 and the average arrears per worker are at least £500. Employers will not be named where an appeal against the Notice of Underpayment is ongoing. Where an employer’s appeal is partially accepted but the criteria are still met, however, the employer may be named.

Employers will be given the opportunity to make representations against being named under the scheme and BIS will take these and public interest considerations into account when deciding whether or not to name an employer.

Aside from prosecution in cases where there is a serious breach of NMW law, a minimum penalty of £100 and a maximum penalty of £5,000 will be applied.

The full policy document on HMRC Enforcement, Prosecutions and Naming Employers Who Flout NMW Law can be found on the BIS website.