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Employers to face tougher minimum wage fines

16 Jan 2014

Fines for employers who fail to pay their staff the national minimum wage (NMW) are set to quadruple under new plans announced by the Business Secretary Vince Cable.

Under the current rules, employers can incur a maximum fine of £5,000 plus a financial penalty of 50% of the missing wages.

However, from next month the maximum penalty will be increased to £20,000 for every underpaid worker, while the financial penalty will rise to 100% of the wages owed.

Announcing the change, Mr 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.’

The new rules, which are expected to come into force in February, have been welcomed by the Trades Union Congress (TUC).

‘The plans announced today to quadruple penalties for rogue bosses who cheat staff out of the minimum wage should make employers think twice before illegally underpaying their staff,’ commented TUC general secretary, Frances O'Grady.

The NMW is currently set at £6.31 an hour for adults aged 21 and over and £5.03 for those aged 18 - 20. 16 and 17 year olds are entitled to a minimum hourly rate of £3.72.