Fines for employers failing to pay the minimum wage

Employers who refuse to pay the minimum wage could face a £200 fine for every worker they had underpaid, Trade and Industry Secretary Alistair Darling announced today.

Employers already have to pay back arrears they owe to the worker and now those who refuse to pay up will be penalised.

Alistair Darling said, "Workers have the right to a decent minimum wage and we are determined they get it. To those employers avoiding the minimum wage the message is don't pay it and you'll pay the fine. In the last year alone the government's enforcement teams across the UK helped over 25,000 workers get more than £3m back in unpaid wages.

"The vast majority of good employers need to know they are operating on a level playing field. These measures will help deliver that."

Her Majesty's Revenue and Customs (HMRC) enforce National Minimum Wage legislation on the government's behalf with the exception of agriculture, where DEFRA enusre that employers are complying with minimum wage requirements.

In cases where workers complain they are not getting the minimum wage, HMRC will investigate the employer. If the complaint is upheld and the employer will not pay then he is given a warning to repay the arrears within seven days. Those employers who do not pay within seven days risk a fine.

Employers who fail to pay the minimum wage can also face prosecution, risking a criminal record and a £5,000 fine. The first cases are currently being investigated, and pending criminal prosecution.

Paymaster General, Dawn Primarolo added:

"We are determined that every worker should earn a fair wage for a day's work. HMRC enforcement teams work across the UK to educate employers and employees about their rights and responsibilities with the minimum wage and where necessary take enforcement action.

"The vast majority of employers are honest and scrupulous but this new measure will put further pressure on those rogue employers who continue to flout the law."

On October 1st 2006 the main national minimum wage rate for workers aged 22 and over increased to £5.35 an hour from £5.05 an hour. The development rate for 18-21 year olds increased to £4.45 an hour from £4.25 an hour. The development rate for 16-17 year old increased to £3.30 an hour from £3.00 an hour.

Employees, employers and any other interested parties such as independent advisors can call the NMW helpline for advice. The number is 0845 6000 678. The line is open Monday to Friday 9.00am to 5pm, all calls are taken in strict confidence.