UK small business owners who fail to pay their employees the minimum wage will face Government fines of up to £20,000, according to reports.
Previously rogue SME employers were required to pay underpaid wages in full including a fine of 50 per cent of unpaid wages up to a maximum of £5,000. However, in a bid to scare employers into action, this figure will now rise to 100 per cent.
Vince Cable, business secretary, is due to say: "Anyone entitled to the national minimum wage should receive it. Paying anything less than this is unacceptable, illegal and will be punished by law.
"So we are bringing in tougher financial penalties to crackdown on those who do not play by the rules. The message is clear – if you break the law, you will face action.
"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."
Providing the legislation is approved the new rules are expected to come into play next month.
Frances O’Grady, general secretary of the Trades Union Congress, said: "The plans announced today to quadruple penalties for rogue bosses who cheat staff out of the minimum wage should make employers think twice before illegally underpaying their staff.
"It’s great that the penalties for flouting the minimum wage have been raised and that it’s easier to name and shame offending employers. It’s crucial now that HMRC is given the resources they need to enforce these new rights properly."
The national minimum wage is currently £6.31 per hour, although there have been recent murmurings within government MPs supporting moves to raise it by a further 50p.
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