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Pay up or pay out

New regulations, expected to come into force in February 2014, will mean that employers who fail to pay their workers the national minimum wage could face a penalty of up to £20,000.
Once the new regulations are approved by parliament, the government then intends to introduce further regulations which will see the maximum £20,000 penalty being applied to EACH underpaid worker.
Sarah Naylor, employment law specialist with Atherton Godfrey, said: “At the moment, an employer found to be paying workers less that the national minimum wage faces a total penalty of between £100 and £5,000 – which can be halved if the unpaid wages are paid within 14 days – much like a parking fine.
“The proposed increase in the maximum penalty is quite significant and comes on the back of changes already made last year to make it easier to ‘name and shame’ employers who fail to pay the national minimum wage.
“These changes are aimed at reducing the number of employers taking advantage of workers by paying less than they are entitled to.
“It’s not yet clear if the ‘early payment discount’ will still apply to the new regulations, but employers need to take the warning seriously as these potentially hefty fines could be the breaking point for some businesses.”

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