Minimum wage crackdown as new levels take effect

Employers that pay below the minimum wage, which has increased today, have been reminded they will soon face tough new penalties.

The hourly rate for over-23s rises from £5.52 to £5.73 from today. For 18-22 year-olds it increases to £4.77 and for 16-17 year-olds the minimum is now £3.53.

The tough new penalties, including an automatic fine of up to £5,000 for employers that underpay their workers, take effect next April as part of the Employment Bill.

Until now fines for failure to pay the minimum wage have only been imposed in a very small number of cases and only for non-compliance with an enforcement notice, a spokeswoman for the Department for Business, Enterprise and Regulatory Reform said.

But under the new system, every employer will be fined without an enforcement notice being issued.

Employment relations minister Pat McFadden said: "The minimum wage has made a lasting and significant difference to the low paid, with around a million workers benefiting from the increase each year.

"It's vital that we safeguard this right with effective enforcement, which is why we're bringing in tough new penalties for those who flout the law.

"The vast majority of employers treat their workers fairly and have nothing to fear from these changes. In fact, stronger enforcement will help prevent rogue bosses from undercutting honest competitors."

The most serious cases will be tried in a Crown Court, which will have the power to impose unlimited penalties.

The Employment Bill also includes a fairer method for dealing with minimum wage arrears - calculated so that workers do not lose out as a result of underpayment.