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Are you paying the correct minimum wage? HMRC announces crack down on beauty salons

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A crackdown on businesses failing to pay the National Minimum Wage in Hackney has found five employees who are potentially owed over £3,500 in unpaid wages.

HM Revenue and Customs (HMRC) joined forces with Hackney Council, Home Office Immigration Enforcement and police yesterday, visiting seven businesses in East London.

Officers focused on employers in the beauty industry who were potentially flouting the law by not paying the National Minimum Wage, tax irregularities, employing illegal workers or committing other licensing or environmental health offences.

“Paying the National Minimum Wage is not optional – it’s the law,” says Tracy Kirkham, assistant director of HMRC’s National Minimum Wage team. “It is unacceptable for employers to cheat staff and HMRC are pleased to work with Hackney Council and other partner agencies to ensure the rules are being followed, and take action where they are not.

“We know from experience that the beauty industry is an area which can often be non-compliant in paying the National Minimum Wage and we are determined to make sure that workers in this sector receive our support and that employers follow the rules.

“Last year over 22,000 workers were underpaid by businesses across the UK and got back a share of over £4.6 million as a result of HMRC’s actions.

“Where we find an employer ignoring the rules, we will ensure arrears are paid in full and the employer is fined. In the most serious cases, criminal prosecution can follow. Anyone who believes they are not being paid the National Minimum Wage can call the Pay and Work Rights Helpline on 0800 917 2368.”

Forty officers visited seven businesses in Hackney, resulting in:

  • Five employees being owed £3,500 due to suspected underpayment of National Minimum Wage
  • Four businesses suspected of VAT and Income Tax irregularities
  • Three people were arrested for immigration offences
  • 11 unregistered beauty/nail technicians were identified
  • One unlicensed business – which was closed down
  • Two businesses were found to have no process for the safe disposal of dangerous chemicals
  • Two further businesses had inadequate ventilation
  • Over 1,000 counterfeit cigarettes were also seized – some of which were gift-wrapped

Deputy Mayor Cllr Sophie Linden comments: “We already know the majority of businesses are good businesses, paying at least the national minimum wage. It is the small minority that exploit their staff that we are determined to find.

“By carrying out regular joint operations like this we can continue to catch employers who flout the law by not paying their employees at least the national minimum wage.

“In Hackney we want all businesses to go one step further and pay their staff the London Living Wage and help make Hackney a fair pay borough, where nobody is expected to do a hard day’s work for less than they can reasonably live on.”