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24/01/2014 - Minimum Wage dodgers face bigger fines

Fines for failing to pay the minimum wage (NMW) will be quadrupled from £5,000 to £20,000 in a bid to protect workers' rights. Vince Cable, the Business Secretary made the announcement on15 January, 2014. The new levels will take force from February onwards.

Under the new rules a maximum fine of £20,000 could be levied for every worker denied the minimum wage. Under the previous system, employers faced just one maximum fine of £5,000 plus a financial penalty of 50% of the missing wages.

David Cameron announced last year that fines for failing to pay the minimum wage would be increased from £5,000 to £20,000. The prime minister also announced that a financial penalty – 50% of the underpaid wages – would increase to 100%. Employers had assumed that just one maximum fine of £20,000 – plus the penalty – would be imposed. In fact the new fine can be levied for every underpaid worker.

Patrick Harrington, General Secretary of Solidarity commented:

"This is a welcome change of approach on the part of the Tories.  It wasn’t so long ago that Tories were suggesting the government allow the NMW to “wither on the vine”. Successive governments (both Labour and Tory) have been soft on those flouting the minimum wage. The question now is whether HMRC is given adequate resources to enforce the NMW."

"We also welcome the fact that the government is looking at steps to shame wrongdoers and highlight what a serious offence it is to pay people less than the minimum salary rate."

"Workers who know of underpayment should report it using the confidential Pay and Work Rights Helpline on 0800 917 2368 and tell our Union at the same time."