Parliament: Minimum Wage: Dozen low-pay firms face stiff fine

TWELVE COMPANIES were threatened with prosecution by the Government yesterday for refusing to pay staff the new national minimum wage.

Ministers said the Government had investigated about 200 "serious complaints" from employees claiming they had been denied the minimum pounds 3.60 an hour, which took effect this month. A dozen firms have still not paid up and may now be fined up to pounds 5,000 for each worker denied the legal minimum. Companies can also be fined for failing to provide staff with information about the new rates.

The Department of Trade and Industry refused to "name and shame" the companies, in the hope that they will comply before they are taken to court.

Ian McCartney, the trade and industry minister, warned: "Make no mistake, there will be no hiding place for the Arthur Daley employers who think they can cheat their employees."

Stephen Byers, the Secretary of State for Trade and Industry, dismissed press reports suggesting widespread abuse of the new rates by employers. He said the introduction of the minimum wage had been "remarkably smooth" and that there was very little evidence of any negative impact on jobs.

A telephone help line has received more than 75,000 calls. Complaints from workers are passed on to enforcement teams to investigate.

John Redwood, the Tories' trade and industry spokesman, said some employers were getting around the increased costs of the minimum wage at the expense of their staff. He said hairdressers, waiters and bar staff were losing benefits or being forced to work longer hours, and some workers had lost entitlements to free work clothes or taxis home.

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