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Paying less than national minimum wage will be penalised

16 May 2007 by
Paying less than national minimum wage will be penalised

Proposals on punishing hospitality employers that pay workers less than the national minimum wage are tougher than anticipated, lawyers have warned.

Under the proposed regime, opened for consultation by the Government today, employers which underpay their staff would be required to repay interest or other cash owed to workers in arrears.

If they refuse to pay the increased wage and make the required back payments, employers could face a fine of more than £200 and risk prosecution, leading to a criminal record and a £5,000 fine.

The stricter enforcement regime is designed to help the Government crackdown on employers who flout the minimum wage.

From 2005-06, the UK's official figures show that 25,314 workers were underpaid, a total arrears of £3.29m, this figure is up 14,053 from the previous year.

Martin Warren, head of employment at law firm Eversheds, said: "This is a tougher regime than expected and employers in the food and catering industries will be especially affected by the proposed changes.

"While most employers will be compliant with current legislation, we are advising them to review policies in the light of these new proposals."

"Food, leisure and catering businesses that persist in ignoring the legislation should be in no doubt that, if discovered, harsh penalties and fines will follow," he added.

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By Daniel Thomas

E-mail your comments to Daniel Thomas](mailto:daniel.thomas@rbi.co.uk?subject=Paying less than national minimum wage will be penalised) here.

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