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Tougher penalties for non- payment of National Living Wage


When the National Living Wage is introduced in April 2016, the government will also implement harsher penalties for employers who do not pay their workers the £7.20 an hour minimum.

These penalties will be tougher than the ones faced by employers at the moment for not paying workers minimum wage, which stands at £6.50 an hour.
A new team will be established within HMRC to pursue employers who do not pay their employees the full living wage if they are over 25 years of age. The enforcement budget for this will be doubled, and penalties for non-payment will be changed from 100% of arrears owed to 200%, although these will be halved if paid within 14 days. The maximum penalty will remain £20,000 per worker.

Employment Minister, Nick Boles, said:
"Most employers make a mistake and our priority is to make sure arrears are paid. Prosecutions will probably go up but they will remain a rare tool."

Mr Boles has also claimed that higher wages will lead to greater spending and create more jobs in the wider economy. This has been disputed by some business owners, and last week, former Sainsbury's chief executive Justin King argued that the government's National Living Wage would "destroy jobs". He claimed that employers would seek to make their workforce more productive, which would lead to fewer jobs.

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