Businesses will face harsher penalties if they fail to pay workers the national minimum wage (NMW), according to new rules unveiled today.
The fine for businesses who break the rules will rise from £5,000 to £20,000 when the new penalty comes into place next month. An offending employer will also have to pay back all of the underpaid wages.
Under the new system, the £20,000 fine will apply for every worker denied the minimum wage, which could add up to huge financial penalties for companies with several underpaid workers.
The minimum wage currently stands at £6.31 per hour for workers aged 21 and over. Those aged 16-20 should be paid between £3.72 and £5.03 depending on their age, and apprentices should earn £2.68 per hour.
In announcing the new penalties, 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 crack down on those who do not play by the rules. The message is clear – if you break the law, you will face action.”