National Minimum Wage — Worker Rights vs Employer Duties

Minimum wage law works as a pair of mirrored obligations. Workers have an enforceable right to receive at least the correct hourly rate for their age, and it cannot be contracted away however willingly it was agreed. Employers carry matching duties to pay it, to keep records proving they did, and to face arrears, penalties, public naming and in serious cases prosecution if they did not. Most underpayment is accidental rather than deliberate. This comparison sets out both sides so each knows where they stand.

Tip: scroll the table sideways to see all columns →

Feature	Worker (claiming underpayment)	Employer (compliance duties)
Legal basis	National Minimum Wage Act 1998 and National Minimum Wage Regulations 2015; right to be paid at least the applicable NMW rate	Same legislation — employers are strictly liable regardless of agreement with the worker or business circumstances
Current rates (April 2026)	National Living Wage (21+): £12.71/hour; 18–20: £10.85/hour; 16–17 and apprentices: £8.00/hour	Same rates apply across all workers within each age band; accommodation offset may reduce effective wage payable (£10.66/day 2025/26)
What counts as working time	Time when required to be at work; sleep-in shifts (if required to be present and available, not merely available to be called); travel between assignments	Must count all time workers are at work and required to be there; uniform-changing time, mandatory training, and trial shifts all count
Accommodation offset	Employer can offset accommodation costs — but only at the prescribed offset rate (£10.66/day for 2025/26); deductions above this rate breach NMW	Can only charge or offset accommodation up to the daily accommodation offset rate; any excess is treated as an unlawful deduction reducing effective hourly rate
Record-keeping	Worker has a right to inspect their own pay records; can request a NMW statement from the Fair Work Agency or raise a grievance if records are withheld	Must keep sufficient records to show NMW compliance for each pay reference period for 3 years; must allow Fair Work Agency officers to inspect on request
Who enforces	The Fair Work Agency (complaint via ACAS or online) — since 7 April 2026, under s.107 Employment Rights Act 2025, replacing HMRC; Employment Tribunal (unpaid wages claim); civil court	Fair Work Agency compliance officers investigate; powers include right to enter premises, inspect records, and issue notices of underpayment
Penalties	No penalty for the worker — underpayment is a debt the employer must repay plus arrears; worker keeps the money recovered	Notice of underpayment requiring arrears plus 200% penalty (min £100, max £20,000 per worker); prosecution possible for wilful non-compliance
Naming scheme	Workers are not named; the naming scheme is a reputational tool against employers that benefits workers by deterring future underpayment	Employers who fail to pay NMW arrears are publicly named by BEIS/DBT; naming is automatic above a £500 total arrears threshold
Civil vs criminal liability	Worker can bring civil Employment Tribunal claim for unlawful deduction from wages (3-month time limit from date of deduction)	Civil liability for arrears + penalty via Fair Work Agency notice; criminal prosecution for wilful non-compliance or obstruction of a Fair Work Agency officer (unlimited fine)
Complaint pathway	Step 1: raise grievance internally; Step 2: report to ACAS helpline (0300 123 1100); Step 3: lodge Employment Tribunal claim within 3 months; or report directly to the Fair Work Agency	Voluntarily disclose underpayments to the Fair Work Agency to reduce penalties; review payroll and working time calculations before a Fair Work Agency investigation opens

NMW applies regardless of what the employment contract says — a contract cannot lawfully agree a rate below NMW. Workers in casual, zero-hours, or piece-rate arrangements are often the most at risk of underpayment. Contact Acas (0300 123 1100) for free guidance before escalating.

Where underpayment actually happens

Very little minimum wage underpayment comes from paying an obviously illegal hourly rate. It comes from working time that goes unpaid and from deductions that pull the effective rate below the threshold. Time spent opening up before a shift, closing down after it, travelling between assignments during the working day, mandatory training, and waiting for security checks all count as working time. Deductions for uniforms, tools, or a required dress code can take an otherwise compliant rate under the line.

Workers: divide your total pay by every hour you actually worked, including the unpaid margins around shifts. That figure is what the law looks at.
Employers: the rate depends on the worker's age, and rising through an age band means an automatic increase — diarise birthdays rather than relying on payroll to notice.
Both: keeping accurate records of hours worked is the single most useful protection either side has.

The most common employer mistake is assuming a salaried arrangement is safe. A salaried worker who consistently works well beyond their contracted hours can fall below the minimum, and there is no defence in the contract saying otherwise.

The most common worker mistake is doing nothing because the sums seem small. Underpayment accumulates across months, arrears are recoverable, and complaints can be made to HMRC confidentially without your employer being told who raised it.

Frequently asked questions

What can I do if I think I have been underpaid?

Raise it with your employer first, in writing, with your own calculation of hours worked against pay received — many cases are genuine payroll errors that get corrected once they are pointed out. If that does not work, you can report it to HMRC, which enforces minimum wage and can require arrears to be paid across the whole workforce, and complaints can be made in confidence. Alternatively you can bring an unlawful deduction from wages claim at the employment tribunal, which is free, after notifying Acas.

Can my employer make me pay for my uniform or tools?

They can require you to buy items, but not if doing so pulls your effective pay below the minimum wage for that pay reference period. Deductions and required purchases connected with the job are counted against your pay for this purpose, whether taken from wages or paid by you separately. Keep receipts. Deductions for the employer's own benefit, such as till shortages or breakages, are also restricted unless your contract expressly allows them and the correct procedure is followed.

Does the minimum wage apply to apprentices and interns?

Apprentices have their own rate, which applies in the first year of an apprenticeship and to those under 19, after which the age-related rate applies — a change employers regularly miss. Interns are trickier: if someone is doing real work with set hours and responsibilities, they are almost certainly a worker entitled to the minimum wage whatever the placement is called. Genuine work shadowing and student placements required by a course are treated differently. Calling a role unpaid does not make it lawful.

What happens to an employer found to have underpaid?

HMRC can require arrears to be paid at current rather than historic rates, impose a financial penalty calculated as a multiple of the underpayment, and refer the employer for public naming. Serious or repeated failures can be prosecuted. Investigations typically cover the whole workforce rather than the individual who complained, so a single error in how hours are recorded can become a substantial bill. Employers who identify a problem themselves should correct it and take advice promptly.

Related guides

National Minimum Wage and Living Wage

Almost every worker in the UK is legally entitled to be paid at least the National Minimum Wage or National Living Wage, depending on their age. Underpayment is unlawful and can be reported to the Fair Work Agency, which has enforced the law since 7 April 2026 and can order back pay plus a financial penalty.

5 min

National Minimum Wage Compliance

The National Minimum Wage (NMW) and National Living Wage (NLW) are legal minimums — not guidelines. Underpayment is a criminal offence and the Fair Work Agency (which took over enforcement from HMRC on 7 April 2026) actively enforces compliance. Many employers underpay unintentionally through salary deductions, unpaid working time, or incorrect worker classification.

5 min

Pay Disputes and Unlawful Deductions from Wages

Every worker has the right to be paid correctly and on time. Underpayment, unauthorised deductions, or failure to pay at all are unlawful and can be challenged through the Employment Tribunal. Understanding how to identify and challenge unlawful deductions protects your financial position.

7 min read

Employment Tribunal Basics

The Employment Tribunal is an independent judicial body that resolves disputes between workers and employers. It is less formal than a civil court but follows strict procedures and deadlines. This guide walks you through the key steps.

8 min

Acas Early Conciliation

Before you can make most types of employment tribunal claim, you must first contact Acas (the Advisory, Conciliation and Arbitration Service) and go through Early Conciliation (EC). This is a free, confidential service that gives you and your employer an opportunity to resolve the dispute without going to tribunal. EC is mandatory, but participation is voluntary — neither side is required to reach an agreement, and you receive a certificate to file your tribunal claim if EC concludes without settlement.

7 min

Hiring Your First Employee

Taking on your first employee is a significant milestone and creates a range of legal and administrative obligations. Missing any of the key steps can result in fines, employment disputes, or worse. This guide covers every step you need to take before your new employee starts work.

7 min

Disclaimer

The information on this page was correct at the time of writing. Amounts, thresholds, and rules may change. Always check the latest official guidance.