Public will shun firms that fail to pay minimum wage

Construction firms that pay workers below the minimum wage risking losing up to 80% of their business because of public opprobrium and legal sanctions, government research has found.

The Department has previously found that 40% of construction apprentices were paid less than the minimum wage in 2012 and said the sector was at “high risk” of underpaying staff.

A survey for the Department for Business, Innovation and Skills found four out of five people would not use the services of a firm that had been found to pay less than the minimum wage.

Ninety percent of people included in the government survey said businesses paying below the minimum wage were a “disgrace” and 78% would encourage friends and family to boycott them.

The survey also found that firms paying below the minimum wage risked having less productive staff because 80% of people admitted not working as hard if they were underpaid.

Employment relations minister Jo Swinson said government was “cracking down on those few rogue companies who are not doing the right thing and breaking the law”.

She said: “Employers should be well aware of the different rates for the National Minimum Wage depending on the circumstances of their workers. Ignorance is no excuse.

“Employers who fail to pay workers the right amount will face a financial penalty, be publicly named and shamed and may even be prosecuted. Today’s research also shows the impact on staff productivity and a business’ reputation of underpaying workers.”

The rate for minimum wage changed on 1 October 2013. The adult rate increased by 12p to £6.31.