Refusing to pay national minimum wage could land employers a fine

Employers already have to pay back arrears they owe to the worker, and now those who refuse to pay up will be penalised.

Alistair Darling, trade and industry secretary, said: “To those employers avoiding the minimum wage, the message is don’t pay it, and you’ll pay the fine.

“The vast majority of good employers need to know they are operating on a level playing field. These measures will help deliver that.”

In cases where workers complain they are not getting the minimum wage, Her Majesty’s Revenue and Customs (HMRC) investigate the employer.

If the complaint is upheld and the employer will not pay, then it is given a warning to repay the arrears within seven days. Those employers that do not pay up within seven days risk a fine.

Employers that fail to pay the minimum wage can also face prosecution, risking a criminal record and a £5,000 fine.

Between 2005 and 2006, more than 61,000 calls were made to the national minimum wage helpline, and the government helped 25,314 workers recover more than £3.2m in unpaid wages.

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The CBI welcomed the move. Susan Anderson, director of HR policy, said: “Firms who pay staff less than the minimum wage are not just acting unlawfully, they are undermining the vast majority of law-abiding employers.

“It is therefore right that those firms who have been given ample opportunity to pay their arrears and fail to do so should be penalised.”