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New penalties for failure to pay minimum wage


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6th May 2009

The Employment Act 2008 has introduced new penalties for the failure of employers to pay their employees the national minimum wage.

The national minimum wage is now set at 5.73 GBP for workers over 22, 4.77 GBP for workers under 22 and a special rate of 3.53 GBP for workers aged between 16 and 17.

The national minimum wage is also set to increase in October 2009.

From 6th April 2009, employers now face financial penalties if HMRC discover they have failed to pay their staff the national minimum wage. Employees will be entitled to claim what they should have received from their employers in arrears. HMRC compliance officers have also been given new powers of inspection and will notify the Secretary of State of any non compliance. Employers may also face criminal penalties for national minimum wage offences. The penalty is set at 50 per cent of the total underpayment but there is a minimum penalty of 100 GBP and a maximum penalty of 5,000 GPB. Employers who comply fully with the notice of underpayment within 14 days of service will receive a discount of 50 per cent on the penalty.

Employers should therefore take into account the newly found powers of HMRC and must ensure that the wages they pay to their employees comply with the national minimum wage.

Corinne Day is a trainee solicitor who specialises in information technology law and intellectual property law. She can be contacted via e-mail on

About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.

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Article Published/Sorted/Amended on Scopulus 2009-05-19 15:50:16 in Legal Articles

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