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East Midlands Chamber News

Tough consequences for failing to pay minimum wage

With the National Minimum Wage for adults increased from the beginning of October, experts at chartered accountants Grant Thornton are asking whether firms are aware of the consequence of non-compliance.

The question comes amid reports of increased activity by HMRC’s NMW teams in the region.

From 1 October, the NMW rises to £6.31 per hour.

It was recently revealed that employers who break the law by failing to pay their employees this minimum rate will be ‘named and shamed’ under revamped rules announced by the Department for Business, Innovation & Skills.

The overhaul of the rules forms part of efforts to increase overall compliance with the NMW and improve enforcement.

“It is hoped that the adverse publicity generated by naming employers will act as another deterrent to employers considering paying staff below the NMW,” said Peter Gomersall, of Grant Thornton's Employer Solutions team.

In the last tax year, HM Revenue and Customs, which polices the arrangements, identified 736 employers across the UK who had failed to pay the NMW.

These investigations led to the recovery of £3.9m of underpaid wages for more than 26,500 workers.

Arrears claims can be backdated up to six years, with additional penalties ranging from a minimum fine of £100 to a maximum of £5,000.