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Guest opinion: Nowhere to hide for car dealers caught paying below minimum wage

Philip Harmer

Author: Philip Harmer (pictured) is a partner at Stormcatcher Business Lawyers, specialising in employment and commercial law.

"The Small Business, Enterprise and Employment Act 2015 gained Royal Assent on March 26, bringing with it potentially far-reaching consequences for employers.

Amongst the changes are those effecting employment law which include provisions for minimum wage, equal pay, employment tribunals and zero hours contracts.

If fully embraced after the General Election by the incoming government, the impending changes would result in some hefty financial penalties for employers who don’t toe the line.

Some may argue that in some instances they don’t go far enough, for example:

* Currently and despite the precipitous decline in employment tribunal claims (cited as being due to the huge rise in tribunal fees) around half of successful claimants fail to receive their awards. As a result, under the new rules, nonpayers could be 'fined' up to £5,000

* Although firms that use zero hours contracts have been the subject of near continual public vilification, the new rules will only ban the use of exclusivity clauses which are rarely adopted anyway

* At the other end of the scale is the ratcheting up of penalties against employers that fail to pay the minimum wage. Currently they already face being named and shamed as well as a fine of up to £20,000, but the new rules could impose an additional penalty of £20,000 per underpaid employee.

The new rules are the latest in a plethora of changes to the employment law landscape which have been described as giving nowhere to hide for firms who do not play by the rules, whether by abusing zero hours contracts or not paying the minimum wage."

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