Why this matters.
National Minimum Wage (NMW) and National Living Wage (NLW) compliance sounds simple — pay at least the legal hourly rate — but HMRC enforcement data consistently shows that many underpayments happen accidentally, through technicalities employers don’t realise apply. Common traps include: deducting the cost of uniforms or tools from pay that brings someone below minimum wage, not paying for time spent travelling between appointments (common for care workers, cleaners, tradespeople), unpaid trial shifts, and salaried staff working unpaid extra hours that reduce their effective hourly rate below the minimum.
HMRC can issue penalties of up to 200% of the underpayment (capped per worker), name and shame employers publicly, and require repayment of arrears going back years. Even well-intentioned employers have ended up on the government’s published list of minimum wage offenders for issues like deducting for staff meals or not paying for mandatory training time. Reviewing your pay structure against these common traps is one of the highest-value compliance checks for any business with hourly or salaried staff near the minimum wage threshold.