The council should have powers to punish businesses that fail to pay the minimum wage, a senior Labour councillor has said.
Andy Hull, Islington Council’s executive member for finance, said: “Councils can’t do a great deal without additional power…even if we think there is significant exploitation in our patch.”
“What I’ve been pushing for is for the government to at least partially devolve responsibilities for minimum wage enforcement to local authorities, [and] give them the power to investigate and to punish non-compliance”.
Mr Hull said that it is very likely that some businesses in the borough are not paying the national minimum wage.
“I think it would be naïve to think it isn’t [taking place] when a lot of the factors that conspire to give rise to minimum wage non-compliance are present in Islington.”
He said that these factors included the “high immigrant work force” and the “proliferation of hotels and restaurants where this practice is common”.
Mr Hull said the council’s relationship with local businesses means that they are well placed to crack down on employers breaking the law: “It’s about knowing your patch; being much closer to the ground. [The council] knows where to go looking.
“We’re already dealing with [businesses] on trade waste, health and safety, and planning and licensing, and we’re already having to use enforcement powers in those regards”.
Earlier this week nearly 50 employers were “named and shamed” by the government for not paying the minimum wage.
A report by Newham Council estimated that people in the UK are losing more than £500m from employers ignoring the law.
It also suggested that 17 per cent of working residents in Newham are paid below the minimum wage.
Bharat Mehta, chief executive of anti-poverty charity Trust for London, said: “The face of poverty in the UK is changing, with low pay and in-work poverty increasing. At the very least no one should be cheated out of their right to being paid the legal minimum and to help with this we need to introduce measures such as giving local councils enforcement powers.
“But we need to do more than this if we really want to tackle poverty and inequality. For example, we need more genuinely affordable housing – to rent and to buy – and employers need to be encouraged to pay at or above the Living Wage.”
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