Employers who fail to pay social care and other staff the national minimum wage will face an increased penalty of up to £20,000 as part an ongoing government crackdown.
Currently employers found to be breaking the minimum wage law must pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid. The maximum penalty an employer can face is £5,000.
However, the government has announced plans to increase that calculation from 50% to 100%, meaning the maximum overall penalty will increase from £5,000 to £20,000.
The changes are expected to come into force in February, subject to parliamentary approval.
A government investigation into 90 residential and home care providers in 2013 identified particularly high levels of non-compliance with minimum wage regulations in social care.
Separate research by King’s College London suggested that this may affect at least 150,000 social care workers.
“Anyone entitled to the national minimum wage should receive it,” said business secretary Vince Cable.
“Paying anything less than this is unacceptable, illegal and will be punished by law. So we are bringing in tougher financial penalties to crackdown on those who do not play by the rules. The message is clear – if you break the law, you will face action.”
The Department for Business, Innovation & Skills will continue to work with HM Revenue and Customs to investigate non-compliance with the law and facilitate prosecutions in the most serious of cases.
The government is also exploring the possibility of bringing in legislation so that the maximum £20,000 penalty can apply to each underpaid worker.