Minimum wage penalties for non-compliant employers to increase

Vince Cable

Employers who do not pay their workers the national minimum wage face increased penalties of up to £20,000 as part of a Government crackdown.

Organisations caught paying under the minimum wage must currently pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid, up to a maximum of £5,000.

From next month, subject to parliamentary approval, the penalty percentage will increase from 50% to 100% of the unpaid wages owed to workers and the maximum penalty will increase from £5,000 to £20,000.

Business secretary Vince Cable said: “Anyone entitled to the national minimum wage should receive it. Paying anything less than this is unacceptable, illegal and will be punished by law. So we are bringing in tougher financial penalties to crackdown on those who do not play by the rules. The message is clear – if you break the law, you will face action.”

He added that it is now easier to name and shame employers who fail to properly pay their workers: “We are working with HM Revenue and Customs to investigate non-compliance and facilitate prosecutions in the most serious of cases. We also make sure that every complaint made to the free and confidential Pay and Work Rights Helpline is looked at.”

The Government has also indicated that it wants to go further, bringing in legislation at the earliest opportunity so that the maximum £20,000 penalty can apply to each underpaid worker.

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