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Increased penalty for failure to pay national minimum wage

The government has published the draft National Minimum Wage (Variation of Financial Penalty) Regulations 2014, which contain provision for increasing the maximum financial penalty for employers who fail to pay the national minimum wage from £5,000 to £20,000. The change is due to come into force in February. The overall penalty (in addition to repayment of arrears) remains at 50% of the total underpayment (subject to the new maximum), with continued provision for a 50% reduction if the employer complies with the notice within 14 days of its service.

The government has also indicated that it intends to introduce legislation as soon as possible to apply the maximum £20,000 penalty in respect of each individual worker, rather than on a collective basis. 

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