Care providers who pay less than the minimum wage could suffer from bad reputations, low staff productivity and high employee turnover, the Department for Business, Innovation and Skills (BIS) has warned.
Eight out of 10 people surveyed on behalf of BIS said they “would not work as hard” if they knew they were being underpaid. The vast majority (85%) said they would look for a job elsewhere.
The research also suggested that four out of five people would avoid doing business with a care provider if they knew the company did not pay at least the minimum wage.
The government is stepping up efforts to name and shame employers who do not comply with minimum wage laws, recognising that social care has been identified by the Low Pay Commission as a particularly high-risk sector.
It is estimated that between 160,000 and 220,000 care workers receive less than the minimum wage.
“Today’s research shows the impact on staff productivity and a business’ reputation of underpaying workers. Businesses can’t ignore this issue and stick their head in the sand,” said employment relations minister Jo Swinson.
“Employers who fail to pay workers the right amount will face a financial penalty, be publicly named and shamed and may even be prosecuted.”
Ken Deary, owner of care provider Right At Home, said: “If you run a business, there is a lot to get your head around. Payroll in particular can be confusing. Despite that, ensuring that your employees are being paid correctly should be at the top of your priority list.
“Everyone deserves the National Minimum Wage as a minimum and if you aren’t paying it you are breaking the law. BIS enforces this law and if caught, you will face fines and public naming, which can hit your bottom line hard and even sink a small business.
“On the flip side, employers who pay correctly enjoy better local and industry reputation and more motivated, hardworking staff.”
The online survey of 2,000 British adults was carried out by polling company Populus between 2 and 3 October.