Understanding National Minimum Wage law

Enforcement and penalties

HM Revenue & Customs has overall responsibility for enforcing the National Minimum Wage (NMW).

A worker can request in writing to see their pay records at any time. If you refuse to allow this or the worker is not being paid the correct NMW amount, they can take the complaint to an employment tribunal or court.

The role of HM Revenue & Customs
HM Revenue & Customs carries out enquiries into NMW compliance. As well as responding to complaints NMW compliance officers have the right to visit employers they suspect may not be paying the NMW. They are permitted to see your NMW records and to ask you or your workers to explain them. HM Revenue & Customs will normally ring you in advance of any such meeting.

If an enforcement officer believes that an employer has failed to pay at least the minimum wage to a worker, the officer may serve an enforcement notice. This will require the employer to start paying the minimum wage and to make up for the previous underpayments for each named worker.

If the employer ignores the enforcement notice, the officer may serve a penalty notice. The penalty notice imposes a financial penalty on the employer of twice the current minimum hourly rate - for the current rate of £5.05 the penalty would be £10.10 - for each day from the time the enforcement notice was issued, and for each worker named in the enforcement notice who has not been paid the money due.

If the above steps do not result in the employer complying with the enforcement notice, the enforcement officer can take a case to a tribunal or county (sheriff) court on behalf of the worker, or prosecute the employer. Deliberate refusal to pay the minimum wage is a criminal offence.

You may appeal against the notices.

You can download detailed information on the NMW from the DTI website (PDF).

Criminal offences
There are six criminal offences relating to the NMW:

• refusal or wilful neglect to pay NMW
• failure to keep sufficient NMW records
• keeping false records
• producing false records or information
• intentional obstruction of a compliance officer
• refusal or neglect to give information to a compliance officer

There is a maximum fine of up to £5,000 for each of these offences.

You can download the National Minimum Wage information for employers guide from the HM Revenue & Customs website (PDF).

Subjects covered in this guide

• Introduction
• National Minimum Wage rates
• Who is entitled and who is exempt?
• What is included and not included?
• The four types of work
• Calculating hours worked and paid leave
• Records and reporting - best practice
• Enforcement and penalties