BIS Publishes Policy on National Minimum Wage Enforcement

BIS has published its updated policy on enforcing the national minimum wage, including prosecutions and naming and shaming employers who break the law.

The policy includes details of new penalties for employers who do not pay the national minimum wage. Employers will have to repay 100% (previously 50%) of the underpayment, together with a penalty of up to £20,000 (previously £5,000) to the Secretary of State. The new penalties apply to any Notice of Underpayment issued by HMRC in respect of a pay reference period beginning on or after 7 March 2014. 

Employers who receive a Notice of Underpayment, no matter how small the underpayment, will be referred by HMRC to BIS for automatic naming via a BIS press release. However, the “automatic naming” is subject to a 28 day appeal process. In addition, employers will be able to make written representations to BIS if there are “very exceptional circumstances”, for example if naming the employer may cause personal harm, national security risks or be against the public interest. 

The Government also plans to bring in legislation at the earliest opportunity so that the £20,000 maximum penalty can apply in respect of each underpaid worker.

The new enforcement policy can be viewed here.