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New Minimum Wage Law

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Yesterday the National Minimum wage rose to £6.50 an hour, part of a series of increases which the Government believes will boost the pay packets of more than a million people by up to £355 a year. As part of this, employers are being warned to ensure staff receive the increased minimum wage rates from Wednesday, or face a penalty. We’ve got all you need to know on this fresh topic.


The New law

The law has now changed so that rather than one standalone fine of £20,000 for not paying the minimum wage, this fine can now be imposed for each employee who does not receive the minimum wage increase.

Furthermore, HMRC now has the power to “name and shame” companies that do not pay the minimum rates. Since being given this power, HM Revenue and Customs has singled out more than 25 employers. For example, in 2013/14, HMRC conducted 1,455 investigations and issued 652 penalties totalling £815,269.

Enforcement teams will also actively target industries suspected of being prone to underpaying staff and the HMRC last year had its budget increased to fund this. The targeted work will be intelligence-led and HMRC said all calls to its Pay and Work Rights helpline would be investigated.

Employers also have to make up arrears and last year more than £4.6m in underpaid wages was paid to 22,000 employees following enforcement action.

You can find out what the new minimum wage rates will be increasing to below:

Year 21 and over 18 to 20 Under 18 Apprentice
2014 (from 1 October) £6.50 £5.13 £3.79 £2.73
2013 (current rate) £6.31 £5.03 £3.72 £2.68
2012 £6.19 £4.98 £3.68 £2.65


Key Contact: Lynne Auton
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