Employers face higher penalty charge for not paying NMW
Posted on in Business News , Political News
The maximum penalty for not paying the national minimum wage has increased from £20,000 per employer to £20,000 per employee, from May 26th.
Currently, there is a maximum penalty of £20,000 for failing to pay the national minimum wage. However, under new rules which will come into force in due course, employers will be penalised up to £20,000 for every individual worker who has not been paid the national minimum wage. Therefore, financial penalties may be significant.
Following the changes to the maximum penalty, the Department for Business, Innovation and Skills (BIS) has published updated guidance on calculating the national minimum wage (NMW). The guidance is intended to assist employers comply with their obligation to pay employees the NMW where applicable.
This may be particularly useful for employers who employ staff where it is not always clear-cut whether they are entitled to the national minimum wage or not. It will further assist in ensuring that calculations are accurate in determining whether an employee is receiving the NMW or not e.g. by considering whether incentive payments or allowances counts towards minimum wage payments.
The guidance document can be found here
The current minimum wage rates are outlined below, however these are due to rise in October 2015.
- Adult minimum wage rate: £6.50
- Youth rate (18-20): £5.13
- Youth rate (16-17): £3.79
- Apprentice rate: £2.73
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