£6 Million Repaid to Workers: What Employers Can Learn from the Latest National Minimum Wage Crackdown

The Department for Business and Trade has named almost 500 employers for failing to pay the National Minimum Wage (NMW) — with over £6 million repaid to around 42,000 workers and more than £10 million in fines issued.

The Real Cost of Getting the National Minimum Wage Wrong

The latest government “naming and shaming” list has once again highlighted how expensive National Minimum Wage mistakes can be. Nearly 500 employers have been fined over £10 million and forced to repay £6 million in unpaid wages to around 42,000 workers.

For many businesses, the damage goes far beyond the financial penalty. Public naming can harm reputation, employee trust, and brand credibility — especially when underpayments stem from simple oversights rather than deliberate wrongdoing.

The truth is, most employers want to pay fairly. But the rules around the National Minimum Wage (NMW) are complex, and it’s easy to get caught out by technical details — missed birthday increases, apprentice rate errors, unpaid working time, or incorrect deductions for uniforms or training.

Why this matters

The government has made it clear that enforcement will only get tougher. A new Fair Work Agency, launching in April 2026, will have greater powers to tackle underpayment of wages, holiday pay and sick pay. The upcoming Employment Rights Bill also forms part of a wider plan to “Make Work Pay” and strengthen protection for workers.

While the headlines may focus on large companies, the reality is that smaller employers, care providers, nurseries, and hospitality businesses are just as exposed. Many underpayments are caused by technical errors rather than deliberate intent.

The most common causes of underpayment

According to the government’s latest educational bulletin, three issues accounted for the majority of cases in this round:

Apprentice rate errors – Paying the apprentice rate to workers aged 19+ who are past the first year of their apprenticeship, or failing to update rates once the apprenticeship ends.
Missed uprating – Not applying new NMW rates in the first pay reference period after an April change, or missing rate changes at key birthdays (18, 20, 21).
Unpaid working time – Pre-shift briefings, closing down, travel between assignments, mandatory training, or rounding down clock-in times.

Other common errors include:

Incorrectly applying the accommodation offset.
Deductions for uniforms or equipment that take pay below NMW.
Classifying staff under the wrong “work type” (salaried hours, time work, output work, etc.).

The cost of getting it wrong

Underpayment doesn’t just risk a fine. Once named publicly, employers face significant reputational damage, as the government publishes full details of the breach — including the total amount owed and the number of affected workers.

With new enforcement bodies on the horizon, every business should take this opportunity to review its processes, systems and training.

How to stay compliant

Here are some practical steps to strengthen your payroll controls:

Map your pay reference periods and make sure NMW uprates apply from the first PRP after 1 April each year.
Automate birthday triggers so rate changes happen automatically when workers move between age bands.
Audit apprenticeships regularly — confirm who’s still in their first year and update rates when training ends.
Check working time capture for pre-shift, post-shift and travel time.
Review deductions such as uniforms, tools and training to ensure they don’t reduce pay below NMW.
Re-test any salary sacrifice schemes for NMW impact each pay period.
Document everything — records must be kept for at least six years.

Training and education are key

Many of the errors identified stem from a lack of awareness rather than intent. Payroll and HR teams need regular training to stay on top of complex NMW rules, pay reference period timings and changing rates.

At Your Payroll Team, we believe education is the most effective form of prevention. We help businesses and payroll professionals stay compliant through:

In-house and virtual training sessions on NMW compliance.
Payroll health checks and compliance audits.
Ongoing support through our YPT Support platform, with templates, guidance and checklists.

Final thoughts

The latest naming round reinforces a simple truth: NMW compliance is everyone’s responsibility — from line managers approving timesheets to payroll teams running final checks. With stronger enforcement coming in 2026, now’s the time to review your controls, update your training and make sure your systems are fit for purpose.

Need help ensuring your payroll is fully compliant?

Talk to Your Payroll Team about an NMW compliance audit or upcoming training dates. Contact us to find out more.