Research released this week from international law firm Pinsent Masons reveals the number of whistleblower reports over the underpayment of the NMW received by HM Revenue & Customs has increased 134% in just one year.

The research shows HMRC received 6,027 reports in the year to 31 March 2018, up from 2,573 in 2016/17.

The law firm attributes the increase partly due to the introduction of a new online complaint system in 2017, which has made it easier for workers to report employers for potential breaches of NMW laws. The number of online complaints received by HMRC increased tenfold to 4,161 in 2017/18, up from 437 in 2016/17.

The Department for Business, Energy and Industrial Strategy (BEIS) routinely publishes a list of firms that have underpaid NMW and National Living Wage. Six recruiters were featured on the latest list of 239 employers found to have underpaid 22,400 UK workers a total of £1.44m, which was published earlier this month.

Commenting on what recruiters need to do to ensure they do not feature on future lists, David Whincup, partner at law firm Squire Patton Boggs, told Recruiter there are only two ways agencies can fall foul of the rules – either by getting the payments wrong or incorrectly calculating the hours worked.

“If you’re paying less because you’re doing a salary sacrifice for example or you’re taking out pension contributions or you are not catering for expenses which the individual has to incur – clothes, uniform, whatever it is, then you’ve got the money wrong.

“If they’re working longer than you think they are either because they’re working through lunch or because there are these searches or checks or getting changed or whatever it is at the beginning or end of the time, then that will extend the period you’re supposed to be paying for and if you’re bang on the minimum wage, then more time needs you fall underneath it [NMW].”

Consequently, Jacqueline McDermott, consultant solicitor at law firm Keystone Law, told Recruiter agencies should ensure strict reporting of timings and if workers are on fixed pay for a certain job, making sure that job is done within the time prescribed.

“A lot of it comes down to the hours of work and monitoring those and reporting them accurately… calculating holiday pay accurately on overtime and commission over correct reference periods. Make sure you do that very carefully because that’s another area where they can fall short by not paying correct amount of holiday pay,” she said.