14 May 2014
As a result of new measures introduced by the Department for Business, Innovation and Skills, as part of the Government’s crackdown on employers who break the law, rogue employers who do not pay their workers the National Minimum Wage (NMW) now face an increased penalty of up to £20,000.
Previously, employers found to be in breach of NMW law had to pay the unpaid wages plus a financial penalty calculated at 50 per cent of the total underpayment for all workers found to be underpaid. The minimum penalty an employer could face was £100 and the maximum penalty was £5,000. The penalty was reduced by 50 per cent if the unpaid wages were paid within 14 days.
Under the new regime, which came into force on 7 March 2014, the financial penalty percentage has increased from 50 per cent to 100 per cent of the unpaid wages owed to workers and the maximum penalty has increased from £5,000 to £20,000.
The Government also plans to go further by introducing primary legislation, at the earliest opportunity, so that the maximum £20,000 penalty can apply to each underpaid worker.
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