Minimum wage penalty to quadruple under new crackdown

CIPD: Employers who fail to pay their staff the national minimum wage will face an increased penalty of up to £20,000 as part of a government crackdown.

Currently, employers found flouting the law must pay the wages that are due to their workers, plus an additional financial penalty to HM Revenue and Customs. The fine is calculated as 50 per cent of the total underpayment for all workers found to be underpaid, with a maximum penalty of £5,000.

But under new proposals, the financial penalty will rise from 50 per cent to 100 per cent of the total wages owed, with the maximum fine quadrupling to £20,000. If approved by parliament, the new rules are expected to come into force this February.

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