Businesses that fail to pay their employees the national minimum and living wage rates will continue to be publicly named and shamed, the government has confirmed.
The current naming scheme will be resumed following a review, however the threshold for the level of arrears at which point an employer’s identity will be made public has risen from £100 to £500.
The government said the new proportionate approach would mean that some businesses falling foul of the rules by minimal sums would not be named provided they correct any errors, although they will still have to pay back workers and can face fines of up to 200% of the arrears.
Employment laws will also be updated to widen the range of pay arrangements available to businesses employing ‘salaried hours workers’, which are workers who receive an annual salary in equal instalments for a set number of contracted hours. Under the changes, workers who are often paid hourly or per day and consequently have different pay checks every month, such as those in the retail and hospitality industries, can be classified as salaried workers.
The government said the changes would provide greater choice and flexibility to both employers and workers.
UKHospitality welcomed the proposed revamp of the naming and shaming scheme but highlighted the continued potential for administrative errors to occur rather than deliberate underpayment. It called on the government to produce sector-specific guidance to help employers understand their obligations and prepare for any changes.
The update comes ahead of a major overhaul of labour market enforcement, with the creation of a single enforcement body to crack down on employment law breaches, set to be announced as part of the forthcoming Employment Bill.