My Employer Is Not Paying the National Minimum Wage
Your employer is paying you less than the National Minimum Wage or National Living Wage. This is unlawful and you can recover back pay through HMRC, the Employment Tribunal, or by making a civil claim.
Quick Answer
All workers (including zero hours workers and those paid by piece-rate or commission) are entitled to the National Minimum Wage or National Living Wage. If your employer is paying less than the applicable rate, you can report them to HMRC (which investigates and can require back pay plus a penalty), or bring a claim for unlawful deduction from wages in the Employment Tribunal (free, no minimum service period). You can claim back pay for up to 6 years via the civil courts or 2 years through the Employment Tribunal.
Full Explanation
The National Minimum Wage Act 1998 entitles all workers aged 16 and over to a minimum hourly rate (the exact rate depending on their age and whether they are an apprentice). From April 2024, the National Living Wage (for workers aged 21 and over) is £11.44/hour; the rate for 18–20-year-olds is £8.60/hour; for 16–17-year-olds and apprentices, £6.40/hour. These rates are set by annual regulation and reviewed each April.
The NMW calculation is more complex than simply dividing gross pay by hours — specific rules apply to different types of work (time work, salaried hours work, output work, unmeasured work) and certain deductions or payments from workers can reduce the NMW pay figure (e.g., deductions for uniforms, tools, or accommodation above a permitted offset). Common areas of NMW non-compliance include: not paying for time spent travelling between jobs, not paying for mandatory training, deductions for uniforms that bring pay below the NMW, and rounding down hours.
Enforcement routes are: (1) HMRC — you can report an employer to HMRC's NMW enforcement team (confidentially). HMRC will investigate and, if a breach is found, will issue a Notice of Underpayment requiring the employer to pay back arrears plus a financial penalty of up to 200% of the arrears (minimum £100). HMRC can also name-and-shame non-compliant employers. (2) Employment Tribunal — you can bring a claim for unlawful deduction from wages under Part II of the Employment Rights Act 1996. The claim must be brought within 3 months less 1 day of the relevant deduction (subject to ACAS early conciliation). The Tribunal can award arrears for the previous 2 years. (3) Civil claim — under the NMW Act, a worker can bring a civil claim in the county court for up to 6 years' worth of arrears, subject to the Limitation Act 1980.
You cannot waive your right to the NMW — any term in a contract purporting to pay less than the NMW is void.
Legal Basis
- §National Minimum Wage Act 1998
- §National Minimum Wage Regulations 2015 (SI 2015/621)
- §Employment Rights Act 1996, Part II (unlawful deductions)
- §Limitation Act 1980
What To Do
Calculate Whether You Are Being Underpaid
Work out your effective hourly rate: take your total gross pay and divide by the total hours you worked (including travel between assignments, mandatory training, time waiting for work at your employer's direction, etc.). Compare this to the applicable NMW rate for your age. If the effective hourly rate is below the NMW, you are being underpaid.
Raise the Issue Internally
Write to your employer (or HR department) setting out the underpayment, the calculation, and what you are owed. This creates a written record. Your employer may resolve it promptly — many NMW breaches are inadvertent errors rather than deliberate exploitation.
Report to HMRC
Complete an online complaint via GOV.UK's 'Complain about National Minimum Wage non-compliance' page. HMRC's NMW enforcement team will investigate confidentially. HMRC can require repayment of arrears plus impose penalties on the employer. You will be kept informed of the outcome.
Bring an Employment Tribunal Claim
Notify ACAS of your intention to bring a claim (ACAS early conciliation is mandatory before issuing). Then file an ET1 claim for unlawful deduction from wages. The Tribunal can award arrears for up to 2 years. The claim must be brought within 3 months less 1 day of the deduction.
Consider a Civil Claim for Older Arrears
If you have been underpaid for more than 2 years, consider a civil claim in the county court. The Limitation Act 1980 allows recovery of 6 years' worth of arrears. This is a breach of contract claim under the NMW Act and can be brought alongside or instead of a Tribunal claim for the most recent 2 years.
Important Deadlines
Important Warnings
You cannot waive your right to the NMW — any term in your contract or written agreement purporting to accept less is void.
Deductions from wages (e.g., for uniforms, tools, or accommodation above the NMW offset) that bring your effective hourly rate below the NMW are unlawful even if you signed a consent form.
Fear of job loss should not deter you from claiming — dismissal or detriment in retaliation for asserting NMW rights is automatically unfair dismissal (no minimum service required).