BUSINESSES that fail to pay staff the new national living wage face fines of up to £20,000, under plans unveiled by David Cameron.

The Prime Minister said employers would "pay the price" and bosses could be barred from acting as directors if they did not ensure the wage boost was passed on.

From next April, firms will have to pay all workers aged over 25 at least £7.20 an hour - up from £6.50 now.

Currently a firm is fined 100% of arrears for non-payment of the minimum wage but that will double to 200% when the new living wage comes in to force. The maximum is expected to be £20,000.

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