Fines double for not paying correct statutory wages

A new package of measures has been announced by the Business Secretary to ensure employees receive the pay to which they are entitled.

During September, the Business Minister Sajid Javid announced that the Government would be implementing new measures to help tackle employers who fail to pay the National Minimum Wage and the National Living Wage, which is due to be introduced in April 2016.

These measures include:

  • doubling the penalties for non-payment of the National Minimum Wage and the new National Living Wage
  • increasing the enforcement budget
  • setting-up a new team in HMRC to take forward criminal prosecutions for those who deliberately do not comply
  • ensuring that anyone found guilty will be considered for disqualification from being a company director for up to 15 years

One of the most significant changes is the doubling of penalties for employers who fail to meet statutory wage requirements. Under the new system, the calculation of penalties for those who do not comply will rise from 100 per cent of arrears to 200 per cent. However, this will be halved if employers pay within 14 days, although the overall maximum penalty of £20,000 per worker will remain unchanged.

Speaking during the policy announcement, Sajid Javid said: “There is no excuse for employers flouting minimum wage rules and these announcements will ensure those who do try and cheat staff out of pay will feel the full force of the law.

“This one nation government is committed to making work pay and making sure hardworking people get the salary they are entitled to.”

The current National Minimum Wage rates, effective from 1 October 2015, are:

  • £6.70 for workers aged 21 and over (increasing from £6.50)
  • £5.30 for workers aged at least 18 but not yet 21 (increasing from £5.13)
  • £3.87 for workers under 18 but above compulsory school leaving age (increasing from £3.79)
  • £3.30 for apprentices (increasing from £2.73)

These will be supplemented next year with the introduction of the National Living Wage on 6 April, which will see wages for workers over the age of 25 rise to £7.20 per hour; increasing to £9.00 per hour by 2020.

Link: Fines announcement