Tougher penalties for breaches of Minimum Wage take effect

Employers could face potentially crippling penalties if they fail to pay the National Minimum Wage (NMW).

The maximum £20,000 penalty for underpayment can now be charged for each worker underpaid. Previously, £20,000 was the maximum that could be imposed regardless of the number of employees who had been underpaid.

The change means employers could be faced with huge bills if they breach the regulations with several employees.

The penalty extension came into effect on 26 May under the Small Business, Enterprise and Employment Act 2015.

The government has also started naming and shaming employers who fail to pay the NMW, putting them at risk of reputational damage.

The current NMW figures are:

Workers aged over 21 £6.50 per hour

Workers aged 18-20 £5.13 per hour

Workers aged 16-17 £3.79 per hour

Apprentices £2.73 per hour.

The figures are due to rise in October.

Please contact Robert Bedford if you would like more information about the issues raised in this article or any aspect of employment law.