Rogue businesses that fail to pay staff the new national living wage will face fines of up to £20,000, David Cameron has warned. In a crackdown on non-compliance, the prime minister has vowed to ensure employers “pay the price” if they do not pass on the Conservative Party’s wage boost.
The prime minister said the new pay policy would only work if it were “properly enforced” and that the government would be funding a new unit at HM Revenue & Customs to crack down on firms thought to be flouting the law.
In an article in the Times, Mr Cameron said the new measures were intended to send a message to “unscrupulous employers” that they would pay the price if they underpaid their staff. He claimed that the government initiative would ensure that “people properly benefit from the recovery” and he contrasted his approach with the “anti-business” stance being adopted by the Labour leadership candidates.
The national living wage, the surprise announcement in the July summer budget, will start at £7.20 an hour from next April, rising to at least £9 an hour by the end of the decade.
Breitbart London has already reported the fears of businesses small and large about the inflationary push the wage will have on their operations as well as its affect on the ability of companies to employ staff.
Despite mounting criticism Mr Cameron is determined to push ahead and will build a new bureaucracy to make sure it is implemented. He wrote:
“We’ve already doubled the fines for non-payment of the National Minimum Wage – and we will double them again for that and the National Living Wage.
“We will significantly increase the enforcement budget, set up a new team in HMRC to take forward criminal prosecutions for those who deliberately don’t comply, and, from this autumn, ensure that anyone found guilty will be considered for disqualification from being a company director for 15 years.
“All that will be all overseen by a new Labour Market Enforcement Director. So to unscrupulous employers who think they can get labour on the cheap, the message is clear: underpay your staff, and you will pay the price.”
Currently a firm is fined 100 per cent of arrears for non-payment of the minimum wage but that will double to 200 per cent when the new living wage comes into force.
So the choice for small business is clear: pay higher wages and incur the costs or avoid the pay rise and pay the fines.
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