The Business Secretary has today announced a package of measures to ensure hardworking people receive the pay they are entitled to that includes tougher penalties for employers who flout minimum wage rules.
Employers who fail to pay staff at least the minimum wage they are legally entitled to will have to pay double what they do now. This reform is intended to increase compliance and make sure those who break the law face tough consequences.
The calculation of penalties on those who do not comply will rise from 100% of arrears to 200%. This will be halved if employers pay within 14 days. The overall maximum penalty of £20,000 per worker remains unchanged. Anyone found guilty will be considered for disqualification from being a company director for up to 15 years.
Importantly, the Government will be putting more resources into identifying and prosecuting employers who fail to pay minimum wage.
A new team of compliance officers in HMRC will investigate the most serious cases of employers not paying the National Minimum Wage and National Living Wage when it is introduced in April 2016.
The team will have the power to use all available sanctions, including penalties, prosecutions and naming and shaming the most exploitative employers
In addition, a new Director of Labour Market Enforcement and Exploitation will be created to oversee enforcement of the National Minimum Wage, the Employment Agency Standards Inspectorate and the Gangmasters Licensing Authority (a non-departmental public body of the Home Office). The Director will set priorities for enforcement based on a single view of the intelligence about exploitation and non-compliance.
As one of the UK’s leading providers of employment solutions to the UK’s flexible workforce, JSA welcomes the introduction of the new measures. Like most compliant operators, JSA never breaks minimum wage rules but there are some rogue operators who still offer solutions that flout the legislation. It is good to see the Government put more into enforcement to name and prosecute those seeking to exploit lower-paid workers.