Gov to Enforce National Living Wage

The Workers of England have campaigned hard to get the UK government to ensure we have a “Living Wage”—not just a “Minimum Wage”—while protecting jobs.

Overview of New Enforcement Measures

The government has unveiled plans to ensure workers receive the national living wage, and outlined measures to punish employers who do not comply with the new regulations.

Key Policy Changes

1. Strengthened Penalties

The penalties for non-payment of both the national minimum wage and the new national living wage will be doubled.

2. Increased Enforcement Budget

The government will boost the enforcement budget, ensuring more resources are available to tackle under-payment.

3. Dedicated HMRC Compliance Team

A new team within HMRC will carry out criminal prosecutions against employers who deliberately flout wage rules. This team of compliance officers will:

• Investigate the most serious cases of non-payment
• Use all available sanctions, including penalties, prosecutions, and naming and shaming

4. Director Disqualification

Any employer found guilty of flouting the rules may face disqualification from being a company director for up to 15 years.

Government and Industry Reactions

“There is no excuse for employers flouting minimum wage rules and these announcements will ensure those who do try and cheat staff out of pay will feel the full force of the law,” said Sajid Javid, Business Secretary.

However, former Sainsbury’s Chief Executive Justin King argued that the national living wage would “destroy jobs,” claiming employers would seek to make existing employees more productive, resulting in fewer roles.

Background and Next Steps

The national living wage of £7.20 an hour for those aged 25 and over was first announced in Chancellor George Osborne’s summer Budget. At the time, Osborne declared: “Britain deserves a pay rise and Britain is getting a pay rise.”

Currently, the national minimum wage stands at £6.50 an hour and is set to rise to £6.70 in October.