Whistleblowing reports of minimum wage violations fall thanks to furlough scheme
The number of whistleblowers reporting businesses for breaking national minimum wage laws has dropped to its lowest in four years, with the furlough scheme considered a key driver of the change.
Whistleblower reports of national minimum wage (NMW) violations fell to 2,488 over the year, down from 2,580 last year, according to law firm Pinsent Masons.
It marks the lowest level of direct complaints in four years.
People working in hospitality and retail, often with salaries close to the national minimum wage, are usually also among the most likely to submit complaints about their employers falling foul of the rules, according to the international law firm.
But with the majority of staff in these industries – which were some of the worst-hit during the pandemic – on furlough because of Covid-19, they were less motivated to submit complaints, Pinsent Masons said in a statement.
The furlough scheme, which came to an end at the start of October, saw the UK government spend £70bn to prevent employers being forced to let go of staff who might have had a job to return to once the pandemic had receded and restrictions lifted.
Around nine million jobs were furloughed at the height of the first lockdown in spring 2020 – almost a third of the entire workforce in the UK.
The furlough scheme was not the only reason for the drop in whistleblowing reports though. More companies have been conducting internal reviews to make sure they are paying the legal minimum wage, said Pinsent Masons.
According to UK law, employers cannot pay staff less than the minimum wage, and anyone can report a business in violation of this to HMRC – even anonymously at the initial stage.
Employers can be punished with fines, and publicly name and shamed by HMRC.
The news comes as the end of the scheme has triggered concerns about a surge in unemployment though the Chancellor last week insisted this was not the case. Rishi Sunak said he was “optimistic” that the end of the job support scheme would not result in a wave of job losses.