Updated: Revised impact assessment added, which now concentrates on businesses that are non-compliant with NMW legislation.

The government wants to increase the maximum penalties that can be imposed on employers that underpay their workers in breach of the National Minimum Wage (NMW) legislation.

The increase in the penalty is intended to ensure that workers are correctly paid by deterring employers from underpaying them.

The impact assessment (IA) examines the impact of applying the financial penalty on a per worker basis.

The IA has been revised, and now only concentrates on businesses that are non-compliant with NMW legislation. The original IA showed an annual cost of £2.58 million to businesses. The revised IA shows no cost to compliant businesses and an average annual benefit to the Treasury of £2.15 million.

https://www.gov.uk/government/publications/national-minimum-wage-power-to-set-the-financial-penalty-on-a-per-worker-basis