The Government has just named 389 employers for failing to pay the National Minimum Wage.
That figure alone should make employers stop and take notice.
But when you look closer — £7.3 million in underpaid wages, 60,000 workers affected, and £12.6 million in penalties — it becomes clear this isn’t a minor compliance issue. It’s a widespread and persistent problem.
And crucially, it’s not limited to small or unknown businesses. Well-known brands feature on this list.
The real issue: it’s not just about hourly rates
One of the biggest misconceptions I still see is this:
“We’re paying above minimum wage, so we’re fine.”
Unfortunately, it doesn’t work like that.
The latest educational bulletin highlights that most breaches are not caused by setting the wrong hourly rate. They are caused by how pay is calculated in practice.
The most common causes in this naming round were:
- Deductions reducing pay below minimum wage (40%)
- Unpaid working time (33%)
- Incorrect apprentice pay (18%)
- Failure to apply updated rates correctly (57 employers affected)
This is where employers get caught out.
It’s not the obvious things — it’s the detail.
Where employers are going wrong
Let’s break this down into real-world payroll risks.
1. Deductions that quietly create underpayments
Even when gross pay looks correct, certain deductions can push pay below minimum wage.
Common examples include:
- uniforms or dress code costs
- PPE or tools
- salary sacrifice schemes
- training costs
- till shortages
- meals or accommodation adjustments
These don’t just affect take-home pay — they affect minimum wage compliance calculations.
This is one of the biggest hidden risks in payroll.
2. Working time is often underestimated
Minimum wage isn’t just about pay — it’s about pay divided by time worked.
The bulletin highlights risk areas such as:
- unpaid pre/post-shift time
- mandatory training
- travel between assignments
- sleep-ins and on-call time
- trial shifts
- rounding of time records
Even small gaps here can result in underpayment across a pay reference period.
3. April increases and birthdays are still being missed
With new rates taking effect from 1 April 2026, timing is critical:
- £12.71 (21+)
- £10.85 (18–20)
- £8.00 (under 18 & apprentices)
But here’s the key point many employers miss:
👉 It’s not about the payroll date
👉 It’s about the pay reference period
If the increase isn’t applied at the right point in the pay cycle, underpayments can happen immediately.
The same applies to age-related increases — when a worker turns 18, 20 or 21, the higher rate must be applied correctly from the next pay reference period.
4. Apprenticeship pay remains a major compliance risk
This continues to be one of the most misunderstood areas.
Common issues include:
- paying the apprentice rate beyond the first year (for those aged 19+)
- incorrect classification of workers as apprentices
- failing to increase pay after apprenticeship completion
These are avoidable errors — but they require proper tracking and controls.
5. Weak records = higher risk
Even if your payroll is technically correct, you need to be able to prove it.
The bulletin reinforces that employers must keep:
- pay records
- hours worked
- deductions
- evidence of payments
And these records should be retained for at least 6 years.
If HMRC investigates, poor records can quickly become a serious problem.
Why this matters even more in 2026
This naming round isn’t happening in isolation.
- The Government has committed to more frequent naming rounds
- The Fair Work Agency launches on 7 April 2026
- Enforcement will expand beyond minimum wage into areas like holiday pay and sick pay
In short: compliance expectations are increasing.
Employers can’t afford to treat this as a low-risk area anymore.
What employers should be doing now
If you take one thing from this, let it be this:
Don’t assume you’re compliant — check.
At a minimum, you should be:
- reviewing April 2026 rate changes
- checking age-related pay increases
- auditing apprentice pay and status
- reviewing deductions and salary sacrifice schemes
- assessing working time practices
- ensuring records are accurate and complete
This isn’t just a payroll exercise — it’s a business risk review.
Final thought
Most employers don’t deliberately underpay staff.
But that doesn’t protect you from the consequences.
Minimum wage compliance is one of those areas where small operational gaps turn into legal breaches very quickly. And as this naming round shows, those breaches can lead to repayments, penalties and public naming.
If you haven’t reviewed your position recently, now is the time.
Need support reviewing your payroll?
At Your Payroll Team (YPT), we help employers go beyond basic payroll processing to ensure their pay practices are fully compliant — not just in theory, but in reality.
Whether you need:
- a minimum wage compliance review
- support with complex pay structures or deductions
- or a full payroll health check
we can help you identify risks before they become costly problems.
👉 Get in touch to arrange a review or find out more about our payroll consultancy services.