‘National living wage’ dodgers face higher penalties
One unintended consequence of this legislation will be to exacerbate the rural premium in terms of the delivery of services in rural areas in respect of for example domiciliary care. Nonetheless it seems right to me that the legislation should be enforced effectively. The article tells us
Employers who fail to pay the new “national living wage” face increased fines under a crackdown on non-compliance announced by David Cameron.
The prime minister said the new pay policy would only work if it were “properly enforced” and that the government would be funding a new unit at HM Revenue & Customs to crack down on firms thought to be flouting the law.
We’ll ensure that anyone found guilty will be considered for disqualification from being a company director for 15 years
A new labour market enforcement director will be appointed to ensure that firms comply with the national living wage – effectively a higher minimum wage rate for workers over 25. From the autumn, anyone found guilty of non-compliance will be considered for disqualification as a company director for 15 years.
In an article in the Times, Cameron said the new measures were intended to send a message to “unscrupulous employers” that they would pay the price if they underpaid their staff. He claimed that the government initiative would ensure that “people properly benefit from the recovery” and he contrasted his approach with the “anti-business” stance being adopted by the Labour leadership candidates.
The national living wage, the surprise announcement in the summer budget, will start at £7.20 an hour from next April, rising to at least £9 an hour by the end of the decade.
For years, there were complaints that the penalties for non-payment of the minimum wage were too low but they were toughened significantly in the last parliament. Originally employers had to pay the amount they had underpaid workers, plus a penalty calculated at 50% of the underpayment, up to a maximum of £5,000. Under the coalition, the penalty was increased from 50% of the underpayment to 100%, up to a maximum of £20,000.