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Penalties for not paying the minimum wage

Do you check to ensure you are paying at least the National Minimum Wage (NMW)?

On Tuesday 26 May 2015 the potential maximum penalty for failing to pay the National Minimum Wage (NMW) increased to £20,000 per worker. Previously this was £20,000 per notice. This means for pay reference periods beginning on or after 26 May 2015 the penalty will be the sum of 100% of the underpayment owed to each worker up to a maximum of £20,000 per worker.

Assuming an employer if found guilty of underpaying 10 employees, each by a total of £5,000, the penalty would be £50,000 whereas previously it would have been £20,000.

Whether you process your own payroll or outsource, you will want to check on this.

Thanks for reading

Paul Harrison, MD