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. 

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

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