Whether you have identified and captured all relevant working time including pre/post clocking in, travel, training etc. This can be calculated differently depending on their worker type for NMW purposes which is a further complication!
National minimum wage (NMW): Avoiding potential trip hazards
3 September 2026
Unfortunately, navigating the rules in relation to NMW is far from straightforward and most instances of compliance failure by employers will not have been intentional but through inadvertently succumbing to some common trip hazards.
We highlight some of those further below but first, a little re-cap!
What is the national minimum wage?
The NMW is the minimum hourly rate of pay which employers are legally obliged to pay to most of their workers, this being increased by the government each April based on recommendations from the Low Pay Commission.
The age related current rates (as at April 2026) are:
| – | 21 & over* | 18 – 20 | UNDER 18 | APPRENTICE |
|---|---|---|---|---|
| APRIL 2026 | £12.71 | £10.85 | £8 | £8 |
*This top age-related rate is termed the “National living wage”
Who enforces it?
At present, it is HMRC, be it that since April 2026 this is done under a contracting arrangement with the “Fair Work Agency” (FWA) who will wholly take over enforcement functions from April 2027.
The FWA was established under the Employment Rights Act 2025 with the aim of creating a single enforcement body for matters relating to the labour market. In doing so it is anticipated that National Minimum Wage compliance activities will themselves benefit from its being better sighted in relation to labour market practices and a rigorous and pro-active approach.
When it goes wrong?
The penalties go up to 200% of the total underpayment which may then go back for up to 6 years. More significant however for some employers can be the reputational damage that arise from being included in HMRC’s list of defaulters and associated press coverage.
Common problem areas
Complying with the NWM rules means more than merely paying at or above the headline NMW hourly rate since there are many factors that impact what is qualifying pay for these purposes and how it is calculated.
Points for consideration include:
1
2
Are any deductions being made from workers’ pay or payments taken from them? This can incorporate those that might have been requested by and implemented for the benefit of the employee.
3
Have you checked that salary sacrifice arrangements could not lead to pay falling below NMW, even if only for one pay period?
4
Paying at the correct rate. e.g. do your controls identify when a worker’s birthday moves them between NMW bands?
5
Time off in lieu; this isn’t recognised in NMW Legislation creating possible complications depending on when the TOIL is taken back.
6
Volunteers: whilst an exemption does exist for voluntary workers, where volunteers both evolve into workers for NMW purposes and receive payments or benefits they can become subject to the rules.
How we can help
We take the time to understand and explain the issues in the context of your business and work with you in order to address them, thereby reducing the risk of non-compliance.
Where HMRC are already undertaking a review of your business, we can help defend your position, liaising with HMRC on your behalf and reviewing any underpayment calculations to confirm their accuracy.
