The government has confirmed in its response to its 2019 consultation that it intends to establish a new single enforcement body for employment rights. The new body will enforce breaches in relation to national minimum wage, modern slavery (including modern slavery statements), employment agencies, statutory sick pay and holiday pay for vulnerable workers.
- The new body will consolidate the functions currently carried out by HMRC in relation to national minimum wage enforcement, the Gangmasters and Labour Abuse Authority in relation to labour exploitation and modern slavery, and the Employment Agency Standards Inspectorate in relation to employment agencies.
- It will have a broader remit including but not limited to the enforcement of statutory sick pay, holiday pay for vulnerable workers, section 54 of the Modern Slavery Act 2015 (which requires large businesses to publish an annual modern slavery statement), and regulation of umbrella companies. No detail has yet been published on how the body will regulate these new areas.
- It will have new powers to tackle non-compliance, including civil penalties of up to £20,000 per worker for the breaches under the Gangmasters Licensing and Employment Agency Standards regimes.
- Following a review of the existing national minimum wage naming scheme (under which lists of employers who have underpaid employees are regularly published), the scheme will be extended to the enforcement areas covered by these newly extended civil penalties under the above regimes.
- The body will need to go through the normal government approval basis and primary legislation will need to be enacted before it is established. There is, however, no indication of timing as to when this will go ahead.
- A copy of the government’s full response can be found here.
- Employers should watch out for publication of further details and developments on how the new body will be set up and use its regulatory powers.
For advice or to discuss what this means for you and your business, please contact your usual Baker McKenzie contact.