NMW penalties soar

Employers who fail to pay the National Minimum Wage (NMW) will soon face penalties of up to £20,000.

Under existing rules, employers that break NMW law must pay the unpaid wages plus a penalty of 50% of the total underpayment, up to a maximum of £5,000.

On 15 January, the Department of Business, Innovation & Skills confirmed that the financial penalty would rise from 50% to 100% of the unpaid wages owed to workers, up to a maximum of £20,000.

Regulations introducing the new limits are expected to be in force in February 2014. The government also plans to introduce legislation so that the maximum £20,000 penalty would apply to each underpaid worker.

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.”

At Palmers, we understand that employment law is a complex issue and employers can find it challenging to stay on top of changing rules and regulations. We can provide expert advice on all aspects of employment law, including National Minimum Wage and defending claims for unlawful deductions from wages.

We also assist in preventing these issues by carrying out employment audits for our clients and by offering our HR package, which includes contracts of employment, policies and procedures.

For more information, please visit our website or contact Lara Murray.