Firms failing to pay workers the national minimum wage will face fines of up to £20,000 under a new crackdown by the UK Government.
Ministers unveiled the plans yesterday to quadruple the maximum penalty for employers caught flouting the rules, rising from the current rate of £5,000.
Businesses that break the national minimum wage law currently must pay the employee’s unpaid wages, plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid.
The changes – expected to come into force next month – will increase the rate from 50% to 100% of the unpaid wages owed to workers.
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.”
The National Minimum Wage Act 1998 creates the minimum wage, which stands at £6.31 per hour for workers aged 21 years and older. Several UK ministers have reportedly been calling behind-the-scenes for a rise in the rate.
TUC general secretary Frances O’Grady welcomed the penalty changes yesterday: “The TUC has long argued that successive governments have been soft on minimum wage dodgers.
“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.
“It’s great that the penalties for flouting the minimum wage have been raised and that it’s easier to name and shame offending employers.”
Labour will call today for better enforcement of the minimum wage during a Commons debate.