Lancashire firm calls for leeway over minimum wage legislation

Karen Riley in her sandwich shop Cafe Crave on Poulton Street in Kirkham.
Karen Riley in her sandwich shop Cafe Crave on Poulton Street in Kirkham.
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The row over businesses failing to pay the minimum wage rumbled on, after a second Lancashire firm called for more leeway from the Government for small companies getting to grips with legislation.

Crave sandwich shop in Poulton Street, Kirkham, near Preston, was among 37 employers named last week by Business Minister Jo Swinson.

Owner Karen Riley was fined after neglecting to pay £1,179.09 to seven workers at the sandwich shop and catering firm. She said the matter was an oversight and the money had been paid back.

David A Farrer Ltd, of Morecambe, was also named by the Government after neglecting to pay £2,261.00 to a worker. A spokesman for the firm said it was “genuine mistake”.

And the company posted a message on its website, attacking the Government for failing to give small businesses the benefit of the doubt.

The statement said: “A genuine mistake was made in the wording of an apprentice contract which a director did not fully understand the implications of. The employee was given a contract with the job title of apprentice and paid in accordance with the National Minimum Wage for apprentices of his age. Because the HMRC did not recognise the legal status of the employee as an apprentice – despite the fact that he was learning and is now working as a plumber elsewhere – we were required to repay the difference between the apprentice rate and the standard rate, which we promptly did.

“The company had no idea that any mistake had been made until we were contacted by the HMRC. We complied with every request that the HMRC put forward and paid the amount back to the employee via them, along with a fine.”

The plumbing firm added: “In every other area of law a certain leeway is given to small businesses because it is understood that they do not have the resources to keep up with all the changes in many areas of law which apply to businesses today. The HMRC inspectors even acknowledged this when they visited us. We feel that the Government is not helping small businesses by using this tactic of naming and shaming.”

The Government list included a number of employers who between them owed workers a total of over £177,000 in arrears and have been charged financial penalties totalling over £51,000.

The government said HM Revenue and Customs’ National Minimum Wage enforcement budget would be increased by a further £3 million in financial year 2015 to 2016 – taking the total to £12.2 million.

The extra money will go towards increasing the number of HMRC compliance officers to identify businesses that exploit their workers by paying them below the National Minimum Wage.

Business Minister Jo Swinson said: “Paying less than the minimum wage is illegal, immoral and completely unacceptable.

“If employers break this law they need to know that we will take tough action by naming, shaming and fining them as well as helping workers recover the hundreds of thousands of pounds in pay owed to them.”