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Govt announces £200 fines for minimum wage evasion

Published On 9 January 2007 at 17:04:32

SME businesses that fail to pay staff the minimum wage will now be liable for a £200 fine for each worker they underpay, the government announced today.

Employers will have seven days to pay arrears after a complaint is upheld and any wages left unpaid after this will be hit with the increased penalty - as well as risking criminal prosecution, which carries a fine of £5,000.

Trade and industry secretary 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."

The Federation of Small Businesses (FSB) has tentatively welcomed the news, although expressed some concerns that small firms are being squeezed by minimum wage rises.

The minimum wage for workers over 22 years old rose to £5.35 last October.

Alan Tyrrell, FSB employment chairman, said: "While we welcome any moves to eradicate unlawful and unfair competition, this must be done without unnecessarily disadvantaging the vast majority of law-abiding small businesses."

Previously, businesses had 28 days to respond to a complaint, with fines of £10.70 per worker for each day after.

Last year, Her Majesty's Revenue and Customs upheld complaints against 1,500 employers, recouping over £3.2 million in missing wages for more than 25,000 workers.

 

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