Employers who refuse to pay the national minimum wage will face fines of £20,000 for each underpaid worker.
Vince Cable, the Business Secretary, will announce today that, from next month, the maximum total fine for such rogue employers will rise from £5,000 to £20,000. He will promise to go further by bringing in legislation at the earliest opportunity to extend the maximum penalty to £20,000 for each worker.
The Liberal Democrat minister said: “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.”
Mr Cable promised to make it easier for rogue employers to be “named and shamed”. Although none has been named yet, government officials say there are cases in the pipeline. Only nine firms have been prosecuted since the minimum wage was introduced in 1998, but Mr Cable said the most serious cases would result in prosecutions.
Frances O’Grady, the TUC general secretary, said: “The plans announced 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 have been raised and that it's easier to name and shame offending employers. It's crucial now that HM Revenue & Customs is given the resources they need to enforce these new rights properly.“