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Legal Updates

New Sanctions to Enforce National Minimum Wage/National Living Wage

06 December 2016 #Employment


On 25 November 2016, two new sanctions came into force which can be used by HMRC where it finds a failure to pay the applicable rate of National Minimum Wage/National Living Wage.

The new sanctions are:

Labour Market Enforcement Undertakings (LMEUs)

  • A binding agreement between the non-compliant individual or business and HMRC, under which the individual or business agrees to rectify any breaches of the National Minimum Wage Act 1998 (NMWA).
  • The LMEU will set out how this is to be done and by what date.
  • Once compliance has been achieved, the LMEU will be removed.
  • Where there is a risk of continued non-compliance, the LMEU may remain in place for up to two years.

Labour Market Enforcement Orders (LMEOs)

  • Issued where a non-compliant individual or business does not agree to a LMEU within the 14-day deadline; or
  • Where a LMEU has not been complied with, HMRC may apply to the court for a LMEO; or
  • Where an individual or business has been convicted for a breach of the above legislation, the court may make a LMEO in addition to any sentence given.

Non-compliance with an LMEO is a criminal offence. The sentence for failure to comply with a LMEO is a fine and/or up to 2 years’ imprisonment.

The government’s decision to give HMRC these additional powers gives further teeth to its stated aim of enforcing compliance with the National Minimum Wage/National Living Wage.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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Russell  Dann

Russell Dann
Solicitor

E: rdann@clarkslegal.com
T: 0118 960 4653
M: 0792 014 4165

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