The Government has outlined how it plans to enforce the National Living Wage when it comes into force next April.
There will be strict sanctions in place for employers that do not comply with the new National Living Wage limits.
Working with an increased enforcement budget, HMRC has announced plans to double the existing penalties and to bring criminal prosecutions against employers that deliberately underpay their employees. The department will also have the power to name and shame employers that fail to pay the minimum wage and to disqualify guilty employers from holding a company directorship for up to 15 years.
Business Secretary Sajid Javid said: “There is no excuse for employers flouting minimum wage rules, and these announcements will ensure that those who do try and cheat staff out of pay will feel the full force of the law.”
Francis O’Grady, General Secretary of the TUC, told the BBC that: “The real risk here is we see employers who want to keep their labour costs low substituting in young, lower-paid workers for adult workers who they would have to pay more.”
Meanwhile former Sainsbury’s Chief Executive Justin King has gone on record to state that the National Living Wage will cause job losses when it comes into force.
Mr King told the BBC that the minimum wage “is not economically justified.”
“You can’t talk about productivity without recognising that one of the consequences of productivity is less people producing the same output.”
“Companies will invest in more productivity and as a consequence there will be less jobs.”
At the end of August Sainsbury’s announced a 4% pay increase. This is set to affect 137,000 employees and will take their wages above the industry average.
