National Minimum Wage – maximum fines for non-payment are increasing

New rules increasing the fines for employers who do not pay the National Minimum Wage (“NMW”) are currently passing through parliament and are expected to become law in February 2014.
The new rules include:
  • Financial penalties of up to 100% of unpaid wages (currently 50%)
  • A new, higher maximum penalty of £20,000 (currently £5,000 with a minimum penalty of £100)
Currently, penalties are reduced by 50% if paid within 14 days – we are waiting to hear if this will continue.
The Government has also announced that it intends to bring in further laws to increase the maximum penalty to £20,000 for each underpaid worker rather than in total, which could result in very large fines in future.
Naming and Shaming Offending Employers
The new increases follow changes made last year to make it easier to ‘name and shame’ employers who fail to pay the NMW.
Now, if an employer does not appeal a Notice of Underpayment from HMRC within 28 days, or unsuccessfully appeals, BIS will consider it for naming.  The employer then has 14 days to make representations on whether it meets any of the following three exclusion criteria:
  • naming by BIS carries a risk of personal harm to an individual or their family
  • there are national security risks associated with naming, or
  • there are other factors which suggest that it would not be in the public interest to name the employer or company.
If the employer doesn’t make any representations, or the representations received are unsuccessful, they will be named via a BIS press release.  It goes without saying that this will carry a large reputational risk to the employer.
Do you need help?

If you are being affected by issues around the National Minimum wage then our expert employment law solicitors can help.  Whether you are an underpaid employee or an employer who needs help complying with the regulations, contact us today for friendly, expert employment law advice:

Tel: 01245 893400
Web: Fill in an enquiry form on our Contact Backhouse page
The Backhouse Solicitors employment law team