David Cameron has pledged to impose tough fines for company bosses who fail to pay the national living wage, which will reach £9 an hour by 2020.
Employers face a penalty of 200% of unpaid wages up to a maximum of £20,000, according to the The Times.
Bosses who fail to pay will also face disqualification as company directors for up to 15 years.
The living wage will come into force in April 2016, starting at £7.20 to over-25s. The current minimum wage for workers aged 21 and over is £6.50 an hour and will rise to £6.70 in October.
“The national living wage will only work if it is properly enforced,” Cameron told the newspaper. “Businesses are responsible for making that happen, and today I’m announcing how we will make sure they do. To unscrupulous employers who think they can get labour on the cheap, the message is clear: underpay your staff, and you will pay the price.”