The UK government is ramping up its enforcement efforts against violations of the National Minimum Wage (NMW) as part of a renewed focus on protecting workers’ rights. This initiative has been bolstered by a substantial increase in the enforcement budget for HM Revenue and Customs (HMRC), which has doubled to £27.8 million since the 2015-2016 fiscal year.

A recent report from the Department for Business and Trade (DBT) highlights the positive outcomes of this enforcement push, revealing that over 108,000 workers received back pay after investigations uncovered non-compliance with NMW regulations. HMRC has successfully closed nearly 3,200 cases, with approximately 900 of those revealing unpaid wages. The report emphasizes the agency’s strategic use of the Geographical Compliance Approach (GCA), a targeted three-tiered enforcement strategy aimed at ensuring that employers in specific regions adhere to NMW laws.

Under the GCA framework, employers are encouraged to voluntarily rectify NMW arrears. However, should issues continue, HMRC is empowered to impose penalties of up to 200% of the outstanding wages owed. As part of the GCA expansion in 2024, three additional regions—including Liverpool, East Midlands, and another yet to be announced—will be incorporated into the enforcement strategy, following earlier additions of areas such as Belfast, Cornwall, and Watford.

Kyle Newton, Head of National Minimum Wage at Azets, commented on the findings, stating, “The sheer scale of HMRC enforcement highlights how widespread NMW non-compliance is. Businesses must review their payroll records and ensure they are adhering to the rules before they face unexpected penalties and reputational damage.”

The government’s message is clear. The DBT reiterated its commitment to enforcing minimum wage laws across all sectors, stressing the importance of compliance. This increased enforcement aligns with a growing awareness among workers regarding their rights, driven in part by initiatives like “Check Your Pay,” which has equipped millions of employees with knowledge about their entitlements.

With predictions of an increase in the minimum wage rate to over £12 per hour by April 2025, businesses are urged to proactively ensure NMW compliance. Employers who neglect to address discrepancies in pay or working time practices may face severe repercussions, including the potential for public naming by HMRC.

As HMRC intensifies its enforcement activities, it is essential for businesses to review their payroll controls and seek professional guidance to mitigate both financial and legal risks. With the government prioritizing NMW compliance, businesses must act swiftly to avoid the consequences of non-compliance in an evolving regulatory landscape.

At Sir Keir Starmer’s investment summit, former Google CEO Eric Schmidt called for the UK government to appoint a “minister of anti-regulation” to address what he views as regulatory barriers stifling innovation and investment. Schmidt’s remarks emphasize the urgent need for reform to help the UK achieve its green ambitions, particularly its target of reducing emissions by 68% by 2030 in line with the Paris Agreement.

Schmidt highlighted that regulatory delays are obstructing the nation’s decarbonisation efforts, warning that without prompt action, the UK risks failing to meet its environmental targets. His comments resonate with growing concerns among government officials regarding slow grid connections and bureaucratic hurdles that threaten the country’s plans for a net-zero power system by 2030.

Business Secretary Jonathan Reynolds echoed Schmidt’s sentiments, admitting that regulatory inefficiencies represent one of the most significant challenges facing the UK, especially in the renewable energy sector. Projects like offshore wind farms, he noted, can take more than a decade to secure approval, thereby impeding progress in achieving climate goals.

Chancellor Rachel Reeves also weighed in, criticizing the inadequacies of past water regulations, particularly in light of the ongoing crisis at Thames Water. She underscored the pressing need for substantial investment in infrastructure but insisted that any price increases for consumers should be directed toward improvements rather than enhancing shareholder profits.

Schmidt’s call for regulatory reform aligns with sentiments expressed by other industry leaders. Greg Jackson, CEO of Octopus Energy, has recently urged the government to lower barriers to the installation of heat pumps, a crucial component of the UK’s green energy transition. Jackson specifically criticized the requirement for planning permission for heat pumps, arguing that such regulatory obstacles deter potential customers and slow progress toward a more sustainable energy landscape.

The discussions at the summit highlight a growing consensus among business leaders and politicians alike regarding the need for a streamlined regulatory framework to facilitate investment and innovation in the UK’s renewable energy sector. As the government seeks to accelerate its decarbonisation efforts, the pressure is mounting to address these regulatory challenges to ensure the nation remains on track to meet its climate commitments.