Just 21 companies have been prosecuted for not paying the minimum wage in 15 years, shock new figures show.
Experts said the small numbers “emboldened” rogue employers who pay workers far less than they are due as ministers were warned to get a grip of the problem, amid claims it is hampering economic growth and increasing the burgeoning welfare bill.
Between 2008 and 2023, only 21 employers were successfully prosecuted for underpaying the minimum wage, with an additional employer accepting a caution, according to official figures from the Department for Business and Trade.
Ministers say criminal prosecution is reserved for the most serious cases, which involve deliberate underpayment or reckless pay practices.
These are usually where there is a wider public interest, or where employers are persistently non-compliant or refuse to cooperate with HMRC, they say.
Last year 524 businesses were “named and shamed” for failing to pay the minimum wage, leaving more than 172,000 workers out of pocket, and ordered to repay workers nearly £16m, plus an additional financial penalty.
But Labour peer Lord Sikka, emeritus professor of accounting at the University of Essex, described those punishments as “puny” and called for more companies to be prosecuted.
The figures on prosecutions were revealed by minister Baroness Jones of Whitchurch in response to a question from Lord Sikka.
He told The Independent: “Our enforcement is incredibly weak.
“I think this is part of the British disease, where the law is not really enforced, because they do not employ enough enforcers. It really then emboldens rogue employers because they can then game the system. And, every year, hundreds of thousands of workers are denied the minimum wage.”
Lord Sikka called for more prosecutions and said the penalty for not paying the minimum wage “should at least equal the remuneration of the company board. The larger the company, the bigger the penalty”.
He added that a failure to pay the minimum wage, brought in by the Labour prime minister Sir Tony Blair has an impact “at many levels of the economy. It could boost growth and reduce the welfare budget – if people are earning more, they have to claim less welfare.”
