Tougher minimum wage enforcement

Peninsula Team

January 24 2014

Employers who receive a Notice of Underpayment from a HMRC officer to say they have not been paying the national minimum wage to their staff currently have to pay the arrears to each worker, and then additionally pay a fine in respect of the underpayment. The fine is currently set at 50% of the total amount of underpayment in respect of all workers underpaid. The maximum penalty an employer can face is £5,000. The government intends to increase the financial penalty percentage from 50% to 100% of the unpaid wages owed to workers. The maximum penalty will increase from £5,000 to £20,000. In order to further strengthen minimum wage payment, the intention is to penalise those with the highest levels of arrears. Employers who are found to have made underpayments of more than £20,000 to any worker after the new laws come into force will not only pay the new higher level of penalties but will face this penalty for each such worker. Where the underpayment for any individual worker or group of workers exceeds £20,000 the penalty will be restricted to £20,000 in relation to that worker or group. The current minimum wage rates are: Age 21 and over: £6.31 per hour Age 18 – 20: £5.03 per hour Over compulsory school age but not yet 18: £3.72 Apprentice rate (apprentices who are under 19; or 19 or over but in the 1st year of apprenticeship): £2.68 Remember contact Peninsula for assistance regarding this issue, we are always happy to help on 0844 892 2772. 

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