The government has now confirmed that the fines that companies could face if they fail to pay minimum wage to their employees (including apprentices) will increase from February 2014. The Maximum penalty will now be sat at a staggering £20,000, which, dependent on the legislative drafting, could be applied to each employee that is underpaid.
This is a huge increase from the current penalty, which is at 50% of the total underpayment of the combined underpayment total, across the whole company. Previously, early repayment of the underpayment (within 14 days of receiving Notice of Underpayment from HMRC) would reduce the fine. However it is not yet clear if this will be kept in the new regulations.
A reminder also that employers must be careful when operating buy back schemes for uniform or tools, as these deductions will count towards the minimum wage calculation and could lead to prosecution.
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