HMRC Names 658 Employers Over Minimum Wage Underpayment: What Small Employers Should Check

A fresh reminder from the Fair Work Agency

In September 2026, the newly created Fair Work Agency published its first “naming and shaming” list of employers who fell foul of National Minimum Wage law — 658 businesses in total, spanning everything from restaurants and supermarkets to solicitors' firms and football clubs. Between them, they underpaid more than 27,000 workers, and enforcement teams have now recovered around £4 million in back pay for those workers, alongside roughly £7 million in penalties charged to the employers involved.

The Fair Work Agency took over centralised enforcement of workers' rights in April 2026, bringing minimum wage enforcement, holiday pay and other employment rights checks under one roof. Officials were clear that most of these cases weren't about employers deliberately trying to cut corners — they were caught out by payroll rules that are surprisingly easy to get wrong. That's worth bearing in mind if you run payroll for even a handful of staff, since the enforcement net is clearly still active and wide-reaching: since 2011, similar rounds have recovered £66 million for 650,000 workers across over 5,200 employers.

The mistakes that keep coming up

A few patterns show up again and again in these enforcement rounds:

• Uniform and equipment costs. Requiring staff to buy their own uniform, tools, or safety kit without reimbursing them can tip an hourly rate below the legal minimum once you account for what they've had to spend out of their own pocket.

• Unpaid training time. Induction sessions, shadowing shifts, and mandatory training all count as working time under minimum wage rules, even when a new starter isn't yet formally “on the clock” in the rota system.

• Misapplied apprentice rates. The lower apprentice rate only applies to apprentices who are either under 19, or in the first year of their apprenticeship — not to any junior staff member who happens to have “apprentice” loosely in their job title.

None of these require any dishonesty to trigger a breach. Most come down to an out-of-date payroll process, or an assumption that's gone unchecked for a while as pay rates and staff have changed.

Current National Minimum Wage rates

Rates increased in April 2026 and are worth double-checking against what's actually going through your payroll:

• Age 21 and over: £12.71 per hour

• Age 18 to 20: £10.85 per hour

• Under 18: £8.00 per hour

• Apprentice rate: £8.00 per hour

How to check your own payroll

A quick health check doesn't take long:

• Take a typical payslip and divide total pay by total hours actually worked, including any unpaid training, briefings, or trial shifts.

• Subtract the value of any uniform, tools, or equipment costs the employee has covered themselves, where these haven't been reimbursed.

• Confirm that anyone on the apprentice rate genuinely qualifies for it — check both their age and which year of their apprenticeship they're in.

• If you provide staff accommodation, review any deduction against the accommodation offset limit, rather than assuming any deduction is automatically fine.

If anything looks borderline once you've done this, it's worth correcting it sooner rather than later. HMRC can pursue underpayments going back several years, and penalties are calculated as a percentage of the arrears owed, on top of repaying the arrears themselves.

We can help

If you'd like a second pair of eyes on your payroll setup — whether that's apprentice rates, uniform policies, or how you record training time — get in touch with Jackson Lee Accountants. We're based in Bury, Greater Manchester, and work with small businesses across the North West to keep payroll compliant without the guesswork.