Recruiters could face unlimited fines if they are prosecuted by the Employment Agencies Standards Inspectorate under new proposals included in the Minimum Wage Review.

The Department of Trade and Industry, of which the Inspectorate is part, has put out a consultation that could result in beefed-up powers to punish agencies more severely for exploiting workers. The consultation ends on 8 August.

Under proposals, recruiters could be tried in Crown Court for failing to pay workers the minimum wage, providing less than adequate accommodation or other deliberate mistreatment or exploitation. Convictions in Crown Court typically carry heavier penalties than those imposed by magistrates.

At present, an agency can be fined up to £5,000 for each offence it is prosecuted for. The Inspectorate contends that this is "potentially most inappropriate", and so is looking at unlimited fines as a means of cracking down on rogue agencies.

The Recruitment and Employment Confederation (REC) told Recruiter that new enforcement powers would be welcome. "The REC has always argued for greater enforcement," said external relations manager Anne Fairweather. "It's one of the eternal moans of the industry that you can have all the laws you like, but you have to enforce them."

"Agencies who are transgressing are not just breaking the law, they're putting our members at a competitive disadvantage."

But Tim Millward, chairman of driving and industrial specialist Extrastaff, told Recruiter that using existing legislation would be a better way to crack down on non-compliant agencies.

"The excess of legislation which has hit our industry and apparently aimed purely at 'the minority of rogue agencies' generally has the opposite effect. Reputable recruiters will always comply — rogue agencies will always ignore it, whatever the threatened penalties, because they know they'll get away with it.

"The Inspectorate must shift their attention to catching the rogues with existing legislation. They could, for example, provide a 'whistleblower line' for reputable businesses in our industry to report the crooks."

l What do you think? Visit recruitermagazine.co.uk