Employers face penalties of up to £20,000 with introduction of new NMW regulations
The announcement today (13 March 2014) by the Government that the national minimum wage will increase by 19p an hour to £6.50 from October has prompted further concerns that employers will face large penalties.
Rogue employers who do not pay their workers the National Minimum Wage will face an increased penalty of up to £20,000 as part of a Government crackdown.
The introduction of the National Minimum Wage (Variation of Financial Penalty) Regulations 2014 on 7 March 2014 means that the financial penalty percentage has been increased from 50% to 100% of the unpaid wages owed to workers. The maximum penalty has increased from £5,000 to £20,000. But that’s not all; the Government has made it easier to name and shame employers who fail to pay the national minimum wage.
Matthew Smith, an employment lawyer and partner with Blake Morgan explains: "The Government continues with their efforts to deliver the Growth review with their objective of making the labour market more flexible, efficient and fair. Further changes are expected with the introduction of legislation that will see the maximum £20,000 penalty being applied to each underpaid worker. This latest rise in the national minimum wage and the increased penalties will focus attention on the circumstances of less well-paid employees. It may also reignite the debate on questions such as internships and the "living wage".