Jane Bradley: Westminster should rethink wage shame game

Who is paid the government's minimum wage is bamboozling both firms and workers, writes Jane Bradley

Every pound is a prisoner to many people in these times of austerity and the spectre of employers choosing not to, or forgetting to, pay their staff the minimum wage, creates hardship and derision. Picture: Getty
Every pound is a prisoner to many people in these times of austerity and the spectre of employers choosing not to, or forgetting to, pay their staff the minimum wage, creates hardship and derision. Picture: Getty

Everyone is all for a bit of good naming and shaming. We love it.

We are the generation of naming and shaming. Every tiny little misdemeanour is openly dragged through the murky, muddy mire that is social media; every miniscule error of judgment held up to scrutiny.

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It is something that is done with not just a little vitriol. Naming and shaming is the kind of public one-upmanship that Twitter takes great delight in, smacking its smug, little lips as it does so.

Which is why it always astounds me somewhat when the UK government’s Minimum Wage Offender Name and Shame list pops into my inbox. This week, it was its biggest list ever – almost 200 companies UK-wide, including 22 in Scotland, which had been forced to pay arrears on outstanding monies owed to employees as a result of failing to pay the full level of minimum wage.

Yet, in a bid to embarrass firms into doing the right thing, the Government has let itself fall into the path of spitefulness.

Westminster is not alone, however. It is not the only government which likes to go about naming and shaming people it doesn’t like – and its initiative is definitely not the most bizarre.

Last year, the Hong Kong Government launched a name and shame project called “The Face of Litter”. It sounds like an April Fool, but it isn’t: the government actually generated pictures of people’s faces based on the DNA found on discarded coffee cups, bits of chewing gum and cigarette butts, believing that seeing their giant mugs – or something which vaguely resembled their giant mugs – beamed up onto a big screen on the underground would shame people into stopping their littering habit.

Meanwhile, in the Philippines, the president last week released a list of people who are allegedly involved in the illegal drugs trade. The list included seven judges, 56 current and former local government officials, three members of the lower house, and 95 police officials and personnel.

In China, the Shanghai Railway Transportation Court posted photographs of people who had been issued with court orders for defaulting on their debts.

However insane, I can see what all of these governments are trying to do. They hope that, by publicly outing people’s wrongdoings, it will prevent them from doing so again.

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In Westminster’s case, it wants to stamp out those nasty businesses which are intentionally paying their employees less than the minimum wage – under the table employers who are using essentially slave labour to man their workforce.

I’m all for stamping out slave labour. But the problem with the name and shame list is that like any kind of blanket punishment, it has its casualties. And that casualty is the small business.

I approached a selection of the Scottish companies on the list to hear their side of the story.

Call me naive, call me a pushover, but every company I spoke to genuinely convinced me that they had no intention of screwing over their employees.

They were not big, evil corporations trying to squeeze every penny out of their staff. For the most part, they were small, or even micro, businesses, desperately trying to make a living and employ staff whenever they could.

One beauty shop owner told me that she had been investigated for two years by HMRC after a disgruntled former employee claimed she had been underpaid during her time at the company.

The investigation, which caused the small business owner a huge amount of stress, not to mention the cost to the taxpayer, did not find that the ex-staff member with a grudge was owed any cash. She was owed nothing. But instead, during the investigation, the powers that be uncovered a tiny amount apparently owed to another former member of staff, who was as perplexed to receive the paltry cheque she was sent by her former boss as her boss was to have to pay it.

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She is now, quite understandably, nervous of taking on any more staff, opting to do everything herself instead.

Other firms were convinced they were paying the right amount, having checked and rechecked it with their accountant – only to find that the rules had changed and they had been underpaying their young staff by pennies an hour.

Some had believed they were in the right to pay a member of staff an apprentice’s wage, only to find that the age limit for apprentices had changed during the year and they should have switched them on to minimum wage.

A hairdresser had paid an intern on placement from college a goodwill payment because he felt bad that she was working for free – only to be hammered by HMRC to the tune of £759 as, he discovered, by paying her at all, he was essentially taking on responsibility for employing her – and needed to pay her minimum wage.

The vast majority of the 22 Scottish companies on the list owed staff well under £2,000 - and that is in most cases, divided between multiple workers.

The few exceptions included Bay Newsagents in Wemyss Bay, Renfrewshire, which is said to owe more than £12,500 to just three members of staff. The owner, a Mr Ronald McConnachie, was not available for comment last week.

That is not to say these anomalies should not be corrected. Of course they should. These people are owed the outstanding money and they should be – and have been – paid it.

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But Mr McConnachie aside, the majority of these companies are now worried that what should have been a fairly minor error, or dealt with privately with the employee in question and HMRC, has now become public.

And they could lose business as a result. Who wants to have their hair cut at a salon which has allegedly been mistreating its young staff? Who will eat at a restaurant which has been paying its workers who knows what under the minimum wage?

The Government is cutting off its nose to spite its face. If these small businesses go under as a result of its policy to name and shame, no matter what the reason for the underpayment, these workers won’t just be receiving the minimum wage.

No, they will be receiving nothing at all.

A crackdown, yes. A name and shame? Perhaps they should think again.