Employers who owe their workers thousands of pounds for failing to pay them the correct National Minimum Wage were named and shamed by Business Secretary Vince Cable on 28 February 2014.
The government is introducing a series of tougher measures to crack down on employers who flout National Minimum Wage law. The first of these, a tougher naming and shaming scheme, came into effect on 1 October 2013.
Five employers are the first to be named under the stricter rules, who between them owe workers a total of over £6,800 in arrears and have been charged financial penalties totalling £3,381.40.
As well as being publicly named and shamed, employers who fail to pay their workers the National Minimum Wage will face higher financial penalties of up to £20,000 as of 7 March 2014.
The government also plans to legislate at the earliest opportunity so that employers will also be given penalties of up to £20,000 for each individual worker they have underpaid, rather than the maximum fine applying to each employer. In the most serious cases, employers can also face criminal prosecution.
Business Secretary Vince Cable said: “Paying less than the minimum wage is illegal. If employers break the law they need to know that they will face tough consequences.
“We know that people are put off using a business’ service if it is found guilty of not paying its workers the minimum wage. This is a clear warning to employers: you will damage your reputation and face a stiff penalty, if you don’t pay the minimum wage.
“Any worker who is entitled to the minimum wage should receive it. It’s not only fair, it’s the law. If anyone suspects they are not being paid the wage they are legally entitled to they should call the Pay and Work Rights helpline.”
The new higher penalties that will come into force on 7 March 2014 will increase the National Minimum Wage financial penalty percentage from 50% to 100% of total underpayments and the maximum penalty applied from £5,000 to £20,000.
Employers have a duty to be aware of the different legal rates for the National Minimum Wage, which were increased on 1 October 2013, and may vary depending on the circumstances of their workers.
Employers are also encouraged to make sure they take into account all details that can affect how much workers are entitled to be paid – including such things as age, accommodation, travel time and deductions for uniform hire.