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UK – Minister announces focus on minimum wage enforcement among employment agencies

05 November 2013

On the 12 July 2013, following a public consultation, the Government announced its intention to reform the regulatory framework for the recruitment sector. The intention is to replace the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Business Regulations 2003 with a simplified regulatory framework, which will continue to protect people who are looking for work but which will remove some of the burden from business.

In a statement from Parliamentary Under-Secretary of State for Employment Relations and Consumer Affairs, Jo Swinson advised: “As part of the government’s ongoing commitment to review regularly the enforcement of the national minimum wage (NMW), we also announced a more targeted enforcement strategy for the recruitment sector, focusing on protecting the most vulnerable, low paid workers.”

“We are now announcing that, from [4 November 2013], resources from the Employment Agency Standards Inspectorate (EAS), which is currently situated within the Department for Business Innovation & Skills (BIS), will move to the HM Revenue & Customers National Minimum Wage team. They will form a new HMRC team and will focus mainly on enforcing non-payment of NMW in the recruitment sector.”

“By increasing HMRC’s NMW team we will ensure that the most vulnerable workers are protected and we will create a level playing field for the vast majority of agencies who play by the rules. A small team will remain in BIS to enforce the recruitment sector regulations. Complaints will continue to be prioritised using a risk-based approach and the level of resourcing will be kept under review. The Pay and Work Rights Helpline will continue to be the first point of contact for individuals seeking help and advice,” she concluded.

Commenting on the announcement, Tom Hadley, director of policy for the Recruitment and Employment Confederation, said: “We are pleased that the government has listened to industry concerns, which were backed by other organisations, including the Trade Union Congress (TUC), and is maintaining an enforcement apparatus. The original intention was to rely solely on tribunals. [The] announcement explicitly recognises the fact that effective enforcement is crucial in order to protect the interests of workers and ensure a level playing field for law abiding business in our sector.”

“This new structure must be implemented effectively, and we have called for a guarantee that all complaints are properly investigated. We emphasised this to the Minister in person last month, and will continue to work constructively with officials to ensure that the future regulatory landscape facilitates industry growth and enables compliant businesses to thrive,” he added.      

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