How can we help?


Named and shamed: Complying with the National Minimum Wage

Approximately 208 employers have been named and shamed by the Government in December 2021 for failing to pay their employees the minimum wage.

Between them, the employers had underpaid approx. 12,000 workers by around £1.2 million. The workers had been underpaid in different ways, including having deductions that reduced pay (such as complying with the dress code), not paying all working time (e.g. trial shifts), or failing to apply the correct rates.

By not complying with national minimum wage laws, the employers had to pay the workers what was owed, and paid financial penalties to HMRC.

So how can issues with non-compliance be avoided?

What is the minimum wage? 

The National Minimum Wage (NMW) is the minimum hourly rate of pay set by the Government each year. The rates apply from 6 April each year.

The current and new rates are as follows:

Current NMW Rates  New Rates from 6 April 2022 

23 and older

(National Living Wage)



21 – 22 years old



18 – 20 years old



16 – 17 years old







 There is a difference between the National Living Wage (23 and older) and the Real Living Wage – the former is set by the Government and is compulsory, with the latter set by the Real Living Wage Foundation and compliance with it is voluntary.

Who is entitled to National Minimum Wage?

The above NMW rates apply to both employees and workers over the compulsory school age, with few exceptions for very specific categories of workers.

How is it assessed?

Compliance with the NMW is assessed by looking at:

  • The worker’s pay reference period (typically one month),
  • Their total gross pay (including salary, bonuses, commission),
  • Any payments or deductions that affect pay for NMW purposes (e.g. deductions for uniform or tools),
  • Their working time.

To find the worker’s hourly rate for NMW purposes, the worker’s total pay (gross pay less any deductions) in the pay reference period is divided by the total number of hours worked in that period.

Once the hourly rate has been calculated, it is then compared with the relevant NMW rate for that worker.

By not complying with national minimum wage laws, the employers had to pay the workers what was owed, and paid financial penalties to HMRC.

Consequences for non-compliance 

Enforcement of NMW rates can be done either via HMRC or the worker themselves. HMRC enforce legislation on behalf of BEIS, and can serve a notice of underpayment, which will set out the arrears that need to be repaid by the employer and can include a financial penalty for the employer to pay to HMRC. This penalty is 200% of the underpayment, up to a maximum of £20,000, but is reduced to 50% of the unpayment if paid within 14 days.

Employers can also be named on a public list, and civil proceedings can be issued if the above remains unpaid.

The worker can also enforce the NMW rates, by making a claim in the Employment Tribunal for an unlawful deduction from wages or for breach of contract.

Further information

If you need any advice on the national minimum wage, please contact a member of our Employment Team.

Our employment law team work alongside clients, as trusted partners navigating the best course of action. We can offer a reassuring hand to help navigate the employment regulations and guide you to the right solution. Find out more about our employment services.

About this article

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

About this article

Read, listen and watch our latest insights

  • 05 March 2024
  • Privacy and Data Protection

How do I protect my business in the event of a personal data breach?

Don’t let your business fall victim to personal data breaches. Join Louise Keenan and Rebecca Dowle, for a quick overview of how to protect your business.

  • 05 March 2024
  • Privacy and Data Protection

AI Podcast: AI and Intellectual Property

In the second of our three-part ‘AI Podcast’ series, Jacob Montague and Lucy Densham Brown, will be exploring how artificial intelligence (AI) interacts with intellectual property rights (IP rights).

  • 04 March 2024
  • Corporate and M&A

Treasury Shares – An Opportunity to be Treasured

Under section 658 of the Companies Act 2006 (‘CA 2006’), there is a general rule against companies acquiring and owning their own shares.

  • 28 February 2024
  • Commercial Real Estate

Hidden risks in serviced office agreements

This is usually a fully furnished and equipped office space that is managed by a facility management company and made available for short-term or long-term rentals to businesses, varying from one week to a year, or even longer.

  • 27 February 2024
  • Employment

Changing Attitudes to Menopause

We have set out some answers to the frequently asked questions that employers ask when considering how to support a menopausal employee.

  • 22 February 2024
  • Employment

Time to take the heat off menopausal women

On 22 February 2024, the EHRC released guidance and resources for employers designed to help employers understand their legal obligations in relation to supporting workers experiencing menopausal symptoms.