Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the potential merits of increasing the maximum fine for employers breaching national minimum wage legislation; and if he will make a statement.

The Government is committed to cracking down on employers who fail to pay the National Minimum Wage. We are clear that anyone entitled to be paid the minimum wage should receive it.

In the 2019/2020 financial year, HM Revenue & Customs completed over 3,300 investigations and found arrears in just over 1,200 of them. They identified £20.8 million in arrears for over 263,000 workers and issued just under 1,000 penalties, totalling £18.5 million to non-compliant employers.

The Government increased the penalties multiplier in 2016 to 200% of the value of arrears per worker, (it was 100% from 2014-16 and 50% before March 2014). In addition, the penalty cap increased to £20,000 per worker in 2016, up from £5,000 per employer before March 2014. The penalty multiplier percentage should be considered in combination with the cap per worker and the lack of any cap per employer, which means that there is no cap on the total penalty an employer may face. More information is available here.

In its December 2018 response to the Labour Market Enforcement Strategy 2018/19, the Government rejected a recommendation from the Director of Labour Market Enforcement that the penalty multiplier be increased again on the grounds that there was insufficient evidence to justify a higher penalty given the high penalty levels already in operation.