What penalties apply for National Minimum Wage non-compliance by employers?
This is a freeview 'At a glance' guide to penalties and the National Minimum Wage.
From 7 April 2026, a new body became responsible for the enforcement of the National Minimum Wage; HMRC are still responsible for raising penalties during the transitional period. The new body, the Fair Work Agency, is expected to become fully responsible for the National Minimum Wage by April 2027.
The information below relates only to the time period where HMRC are responsible for enforcement of the National Minimum Wage.
Where HMRC identify that an employer has failed to pay the National Minimum Wage, they may issue a notice requiring:
- The arrears of wages to be paid to the worker.
- A financial penalty to be paid to the Secretary of State.
From 26 May 2015, the basis for the maximum National Minimum Wage (NMW) penalty has changed from £20,000 per notice to £20,000 per worker.
For pay reference periods starting on or after 1 April 2016 the underpayment penalty is 200% of the underpayment subject to the £20,000 per worker maximum as above.
The minimum penalty per notice is £100.
Employers have 28 days from the date of service of the notice to lodge an appeal.
In serious cases of non-compliance, employers may be prosecuted which can result in an unlimited fine.
HMRC periodically 'name and shame' employers failing to meet the minimum wage. For such a release in December 2021, see: Over 200 employers called out for falling short of paying staff the minimum wage
Useful guides on this topic
National Minimum Wage
The National Living Wage rates/National Minimum Wage rates all change annually on the 1st April. Employers need to ensure that they make the necessary adjustments.