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Government pledges to enforce fair payment

Open-access content 1st September 2015
FM firms must 'step up' and pay living wage

Government departments fail Living Wage test

Living Wage "will push up cleaning costs"

01 September 2015 | Herpreet Grewal


The government has announced new measures to ensure that people receive fair pay.


Companies will face double the amount of penalties for non-payment of the minimum wage and the new National Minimum Wage, and there will be a "dedicated team" set up in HMRC to take forward criminal prosecutions for those who deliberately do not comply.


Anyone found guilty will be considered for disqualification from being a company director for up to 15 years.


There will be an increased budget for enforcement of these measures, says the government. 


A new director of Labour Market Enforcement and Exploitation will be created to oversee enforcement of the National Minimum Wage, the Employment Agency Standards Inspectorate and the Gangmasters Licensing Authority (a non-departmental public body of the Home Office). 


Business secretary Sajid Javid said: "There is no excuse for employers flouting minimum wage rules and these announcements will ensure those who do try and cheat staff out of pay will feel the full force of the law."


Javid added: "The calculation of penalties on those who do not comply will rise from 100 per cent of arrears to 200 per cent. This will be halved if employers pay within 14 days. The overall maximum penalty of £20,000 per worker remains unchanged."


A consultation will be launched in the autumn on the introduction of a new offence of aggravated breach of labour market legislation.  


The government also says it will improve the guidance and support made available to firms on compliance and will work with payroll providers to be sure payroll software contains checks that staff are being paid what they are entitled to.


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