National Minimum Wage (NMW) enforcement activity has reached new levels. During 2018, NMW was the second highest cause of HMRC compliance investigations, resulting in hundreds of businesses facing lengthy and costly reviews, fines, and large repayments to workers.

Often, employers have inadvertently made ‘technical breaches’ or fallen foul of a changed interpretation. Nonetheless, these businesses were publicly named and shamed named for owing millions of pounds to over 200,000 workers.

Sectors with a high proportion of low-paid workers are most susceptible to falling foul of the rules. Retail, social care, child care, food wholesale or processing, cleaning and maintenance, hospitality and employment agencies are amongst the sectors where employers are most at risk.

Why is your industry a target for NMW enquiries?

With NMW the devil is in the detail, as others have found out to their cost. You can easily put yourself at risk if you aim to pay at or above the NMW rates. This is true for staff paid hourly or for those who are salaried whose basic rate is designed to match NMW levels.

Using the wrong pay periods for calculating pay, failing to pay staff for travel time, underpaying apprentices and making deductions from pay for uniforms and similar items are other common mistakes that have resulted in fines and repayment orders.

As HMRC are looking to improve NMW compliance they are targeting both large employers who have underpaid a large number of workers, as well as cases involving only a few workers. Remember, it’s easy for a current or former employee to complain to HMRC – and the onus is on you to disprove their allegation, not the other way around.

Are you at risk?

If your answer is ‘yes’ to any of the following questions, you urgently need to review your processes:

  1. Do you keep time records for hourly staff, but not for salaried staff?
  2. Do you record clocking on and off times, but not break times?
  3. Do you take deposits for uniforms, locker keys, swipe cards, essential equipment and similar items from your staff?
  4. Do you ask staff to supply (or cover the cost of) clothing they wear as part of a dress code (e.g. white shirt, black shoes)?
  5. Do your contracts for salaried staff fail to explicitly state the number of basic hours they are expected to work in a year?
  6. Do you pay salaried staff on a fortnightly or four-weekly basis?
  7. Does a worker ever take a trial shift that you do not pay them for (eg a failed trial shift)?
  8. Do your staff buy goods and/or services from you that they pay for via the payroll?
  9. Do you run and manage a savings scheme for your staff?
  10. Do you have a salary sacrifice scheme in place for workers on NMW?

How we can help

If any of these questions have left you concerned, WMT can help.

Whether you just need to make some changes to make sure you are NMW compliant, or are in the middle of an HMRC investigation, our experienced team will provide the help and support you need.

Contact WMT’s Peter Davies on 01727 838255 or at to arrange a free initial discussion.