National Minimum Wage compliance
The UK government recently released its latest ‘naming and shaming’ list of employers who had been identified as not paying their workers national minimum wage (NMW).
As with previous lists, the employers listed included a number of large businesses and major high street brands.
Breaches are often due to technicalities rather than a deliberate intention to underpay workers, but the headlines which follow publication can damage employer reputation and disrupt their workforce.
Key highlights from Round 21 (Published May 2025)
- 518 employers named and shamed
- £7.4m in underpayments
- 60,000 workers affected
- Common causes of underpayment:
- 35%: deductions from pay (eg uniforms, meals, travel)
- 31%: unpaid working time (eg pre/post-shift work)
- 16%: incorrect apprenticeship rates
This round follows the April 2025 increase in the national living wage (NLW) to £12.21.
The latest list of employers demonstrates that HMRC's focus remains firmly on compliance in this area. Employers should be considering their processes and procedures around NMW to ensure compliance with the NMW legislation.
National Minimum Wage risk areas
- The first stage when considering NMW compliance, this determines the calculation methodology for NMW.
- Worker categorisation impacts the period for which NMW is calculated, what elements of pay counts towards NMW and what time counts as working time.
- How is working time captured?
- What time is paid – according to a rota or actual working time? Are there any working practices (at any location) which could lead to additional working time?
- Are pre-shift briefings, late finishes, or missed breaks accounted for?
- Are employees required to change into uniform/PPE before/after shifts?
- Are excess hours calculations being performed?
- Do deductions (eg for uniforms, social clubs, travel loans) reduce pay below NMW?
- Salary sacrifice always reduces pay for the purposes of NMW and results in employees being paid at a lower hourly rate.
- Are there appropriate controls in place to mitigate the risks in this area?
- Are employees required to purchase any items of clothing (such as black trousers/shoes) or additional items of a uniform to enable them to perform their duties of employment?
- It should be noted that a dress code does not have to be formally documented, it could be employee’s perception on a location-by-location or role-by-role basis.
The government confirmed that the employers included in the latest round of naming and shaming have been based in the following regions:
Data published in The Department of Business and Trade ‘National Minimum Wage Naming Scheme Round 21 May 2025 Educational Bulletin’.
How RSM can help
Our fair pay team at RSM specialises in mitigating the risks of NMW breaches for clients by reviewing policies and procedures and making recommendations to update systems and controls. The team draws on over a decade of combined experience in NMW, including ex HMRC NMW inspectors, tax and employment law specialists, with experience of working with people, reward and payroll teams across all industries.
We can help with the following:
- Contractual reviews to determine worker categorisation.
- Updating contracts to clarify categorisation or mitigate NMW risks.
- Policy and/or work practice reviews to support with the identification of NMW risk areas.
- Pay element review to determine what pay elements can be included towards NMW.
- Educational workshops to upskill your key stakeholders.
- HMRC audit support.
Where required we can support on a legally privileged basis.
Contact our specialists for more information: Andrew Timpson, Charlie Barnes or your usual RSM contact.