Low pay commission publishes non-compliance and enforcement report

The Low Pay Commission (LPC) has published its fourth standalone report: Non-compliance and enforcement of the National Minimum Wage 2021. The LPC has adapted its approach to reflect the existence of the Coronavirus Job Retention Scheme (CJRS), which has prevented it from carrying out its usual analysis. The report attempts to assess the immediate challenges for National Minimum Wage (NMW) enforcement. It also considers the likely challenges that will affect enforcement over the coming year.

The report does not, on the whole, make new recommendations. It instead reviews progress in key areas identified in previous years. The following points may be of particular interest: The LPC notes that the government consulted in 2019 on proposals to create a single enforcement body. While the report mentions that legislation is expected to be brought forward in an Employment Bill, there is no current timetable for this and the Queen’s Speech on 11 May 2021 did not mention an Employment Bill.

  • The LPC will continue to monitor emerging case law (in particular the recent Uber decision) and their implications for NMW enforcement;
  • As the CJRS is phased out, the LPC anticipates that shifts in the economy and labour market will make it more important than ever to ensure NMW compliance. The report notes that the complexity of the CJRS, coupled with a refocusing of HMRC’s targeted enforcement regime, is likely to have increased the risk of underpayment.
  • The LPC anticipates that the impact of the CJRS on workers’ hours and pay will be a recurring feature for many years, noting that the low volume of complaints represents a serious barrier to an effective enforcement system.

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