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Until recently employers that broke the National Minimum Wage law had to pay the unpaid wages plus a financial penalty calculated at 50% of the total underpayment for all workers found to be underpaid. The maximum penalty an employer could face was £5,000.

Following an announcement by the Prime Minister before Christmas the Government is to increase the financial penalty percentage from 50% to 100% of the unpaid wages owed to workers.  The maximum penalty will increase from £5,000 to £20,000.

The Government wants to go further and is considering bringing in legislation at the earliest opportunity so that this maximum penalty of £20,000 could apply to each underpaid worker.

As well as higher penalties they propose to make it easier to name and shame employers who fail to pay their workers what they are due.  The Government’s intention is to penalise those with the highest level of arrears.  For the current rates of National Minimum Wage please see our Quick Reference Section.