Written by Rob Collier-Wright

The UK Government has announced plans this month to bring in new legislation increasing the maximum financial penalty for rogue employers who fail to pay their employees the National Minimum Wage (“NMW”).

At present, employers who flout their NMW obligations must make good on arrears, as well as incurring a financial penalty of 50% of the total underpayment to all workers to the Secretary of State, to a maximum of £5,000.

The draft National Minimum Wage (Variation of Financial Penalty) Regulations 2014, expected to come into force in February 2014, will increase the financial penalty to 100% of the total underpayment, to a maximum of £20,000.

The Government has further plans to ramp up the pressure, proposing that the maximum penalty of £20,000 should be levied in respect of each underpaid worker, rather than all workers.

Link to press release: https://www.gov.uk/government/news/national-minimum-wage-penalties-increased-on-rogue-employers