The Government have decided to increase the penalties issued to rogue employers who are not following the law and paying their workers below National Minimum Wage. These employers will now be issued with a fine up to £20,000 per underpaid worker in a Government crackdown. At present employers who are caught paying their employees less than National Minimum Wage, have to pay back the unpaid wages to the worker as well as a calculated penalty based on 50% of the underpayment. This applies to all found underpayments to the maximum value of £5,000. However, before Christmas the Government announced that as well as the monies owed to the employee to be settled, the penalty will rise from 50% of the underpaid funds to 100%, to a maximum of £20,000, which is applied to each underpaid worker. “The current penalty is calculated as 50% of the total underpayment for all workers specified in the Notice of Underpayment issued to employers by HMRC if they break National Minimum Wage law. Where this amount would be less than £100, the minimum penalty of £100 is applied. Where this amount would be more than £5,000, the maximum penalty of £5,000 is applied. The penalty is reduced by 50% if the unpaid wages are paid within 14 days. The percentage figure and the maximum penalty can be increased by Regulations. Primary legislation is needed to introduce a penalty of £20,000 per worker into the NMW Act 1998.” – www.gov.uk This initiative by the Government is aimed to target the employers that hold the highest level of wage arrears. With employers who owe more than the £20,000 penalty to multiple workers, will be forced to pay the penalty for each employee. If the amount for an individual exceeds £20,000, the penalty will be capped at £20,000 in relation to the worker. “Anyone entitled to National Minimum Wage should receive it. Paying anything less than this is unacceptable, illegal and will be punished by law…The message is clear – if you break the law, you will face action.” said Business Secretary Vince Cable “The National Minimum Wage plays an important role in supporting low-paid workers whilst making sure they can still find work. Enforcing this is a key to fairness in our workforce.” – www.gov.uk