The Committee recommends that a naming and shaming system should apply to every single employer who breaks national minimum wage law, not just those who 'wilfully' disregard it – which is the Government’s current position.
It also says more must be done to raise awareness of the rates of the national minimum wage and of the penalties that exist for non-compliance.
The Committee warns that increasing figures for non-compliance for some sectors in Scotland, such as hospitality, suggest the Government’s targeted enforcement campaigns are not working.
HM Revenue and Customs, the Department for Business, Innovation and Skills and the relevant sectors must work closely together to tackle the problem of non-compliance, particularly for sectors where failure rates are high.
The Committee welcomes the ban on using tips to make up employees’ wages but asks the Government to make clear how it will encourage all businesses to sign up to the new code of best practice, which is designed to make the tipping system more transparent.
The Committee also recommends that HMRC improves its information-gathering systems to ensure select committees are provided with the most comprehensive information, within reason, that is available - which it failed to do for this inquiry.
The Chairman of the Committee, Mohammad Sarwar MP, said:
"Customers must have complete confidence that the services they pay for are compliant with national minimum wage law. Equally, it is vital that employees understand their entitlement and are not exploited, either unintentionally due to confusion about the law or by bosses looking to make a quick buck.
"Naming employers who fail to comply is one crucial step in tackling this problem. But this must be done alongside effective awareness campaigns which get the messages about rates and penalties across to all sectors. No businesses should be in the dark about the law, and all must be ready and willing to comply."