Not getting the new minimum wage? Your employer could get a £20,000 fine

The law has now changed so that rather than the penalty being £20,000 on a company for not paying the minimum rate, this fine can now be imposed for each staff member who is underpaid. In 2013/14 HMRC conducted 1,455 investigations and issued 652 penalties totalling £815,269.

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.

HMRC also has the power to “name and shame” companies which do not pay the minimum rates and has singled out more than 25 employers since it was given this power.

However, this has caused some controversy with the companies complaining that they have been publicly humiliated after only minor or accidental infractions.

Industries suspected of being prone to underpaying staff will also be actively targeted by enforcement teams 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 will be investigated.

*Britain’s manufacturers are calling for the minimum wage’s “apprentice rate” to be scrapped and instead for people on training schemes to be paid according to their age. EEF, the trade body for the UK’s engineering and manufacturing companies, said the current system is “confusing” and “complex” for employers in its submission to the Low Pay Commission’s consultation on the minimum wage. It added many of the companies it represents already pay more than the apprentice rate to attract and retain the quality of staff they need for their training programmes.

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