The Government has published its latest National Minimum Wage enforcement list , naming 658 employers that were found to have underpaid workers. More than £4 million in arrears has been repaid to over 27,000 employees, while employers faced penalties totalling approximately £7 million. Among those named were well-known brands B&Q and Five Guys, demonstrating that National Minimum Wage compliance challenges can arise in organisations of any size.
Although the headline figures have attracted significant attention, the findings carry an important message for employers across all sectors. Complying with National Minimum Wage legislation involves far more than simply paying the correct hourly rate. Factors such as working time, payroll calculations, deductions, allowances and work-related expenses can all affect whether a worker receives their full legal entitlement.
The latest enforcement action serves as a timely reminder for businesses to review their payroll practices, ensure compliance procedures remain robust and address any potential issues before they develop into costly financial or reputational risks.
Key Findings from the Latest Minimum Wage Naming Round
The Government published its latest minimum wage naming round on 3 September 2026, identifying employers across a wide range of sectors that had failed to comply with National Minimum Wage requirements. The employers involved were required to repay arrears to workers and faced financial penalties as a result of the underpayments.
B&Q
B&Q Limited appeared at the top of the list. Government figures show that the company underpaid £456,934.72 to 4,530 workers. The retailer stated that the shortfall was unintentional and related to calculations involving geographical allowances that were paid in addition to minimum hourly rates. The company also confirmed that all affected employees were repaid in full during July 2025.
Five Guys
Five Guys JV Limited was also named in the latest enforcement round. Published figures show an underpayment of £54,642.47 affecting 3,699 workers. The company explained that the issue resulted from technical differences in how payroll regulations were applied and said that all affected current and former employees had received the payments owed to them.
The list included retailers, restaurants, care providers, childcare organisations, NHS bodies and other employers from across the UK economy. The cases demonstrate that minimum wage risks are not confined to any specific sector and can arise even where employers believe they are paying above the statutory minimum.
Why National Minimum Wage Compliance Involves More Than Paying the Correct Rate
One of the most common misconceptions surrounding National Minimum Wage compliance is that paying an hourly rate above the legal minimum guarantees compliance.
In reality, the calculation is more complex.
The rules require employers to consider both:
- The pay that counts towards National Minimum Wage calculations; and
- The working time that counts during the relevant pay reference period.
Certain payments may not count towards minimum wage pay, while some deductions and employee expenses can reduce the amount treated as qualifying pay for minimum wage purposes.
As a result, an employee may appear to receive the correct hourly rate on paper while still being underpaid under National Minimum Wage legislation.
The same principle applies to salaried workers. A fixed annual salary does not automatically eliminate minimum wage risk, particularly where employees regularly work additional hours beyond those on which their salary has been calculated.
Common payroll mistakes that can lead to underpayment
Many National Minimum Wage breaches arise from technical payroll issues rather than deliberate attempts to pay workers less than they are entitled to receive.
1. Work-Related Deductions and Expenses
Certain deductions can reduce pay for minimum wage purposes.
Problems may arise where workers are expected to cover costs associated with their role without reimbursement. Depending on the circumstances, examples may include:
- Uniforms
- Safety equipment
- Specialist tools
- Protective clothing
- Other mandatory work-related items
An employee’s gross pay may initially appear compliant, but once relevant costs are considered, the amount counted for National Minimum Wage purposes may fall below the legal threshold.
2. Unpaid Working Time
Employers should carefully assess working time that occurs outside scheduled shifts.
This may include:
- Security checks
- Opening procedures
- Closing duties
- Shift handovers
- Mandatory training sessions
- Required administrative tasks
Individually, these activities may only add a few minutes to a shift. However, when repeated regularly across weeks or months, they can have a significant impact on minimum wage calculations.
3. Incorrect Treatment of Allowances and Premium Payments
Another common issue arises when employers assume that every payment included within payroll counts equally towards National Minimum Wage calculations.
Certain allowances and premium payments may be treated differently from basic pay for minimum wage purposes.
The case involving B&Q serves as an important reminder for employers that use geographical allowances, location allowances or similar pay enhancements to ensure they fully understand how those payments are treated under the regulations.
4. Incorrect Worker Information
National Minimum Wage entitlement can change due to:
- Age
- Apprentice status
- Changes in legislation
Statutory minimum wage rates are typically updated each April. Employers should ensure payroll systems are updated promptly whenever an employee moves into a different age band or experiences another change affecting their entitlement.
As of April 2026, the National Living Wage for workers aged 21 and over is £12.71 per hour, while workers aged 18 to 20 are entitled to £10.85 per hour.
What Are the Consequences of National Minimum Wage Underpayments?
Where an employer is found to have underpaid workers, enforcement action can have both financial and reputational consequences.
Employers may be required to repay arrears to affected workers, pay financial penalties, correct payroll processes, maintain additional records, and address reputational damage resulting from public naming.
Businesses looking to reduce these risks can benefit from regular payroll reviews and professional support through a structured Payroll Management Service that helps improve accuracy and compliance.
What Should Employers Check in Their Payroll?
A proactive payroll review can help identify issues before they become compliance concerns.
1. Confirm Minimum Wage Rates
Ensure every worker is receiving the correct rate based on their age and, where relevant, apprentice status.
2. Review Actual Working Hours
Consider whether employees undertake work before or after their scheduled shifts, attend compulsory training or complete other work-related duties that should be counted.
3. Check Deductions and Expenses
Review all payroll deductions and determine whether employees incur any costs connected with their role that could affect minimum wage calculations.
4. Assess Allowances and Pay Enhancements
Where payroll includes:
- Location allowances
- Shift premiums
- Overtime enhancements
- Similar supplementary payments
Confirm they are being treated correctly for National Minimum Wage purposes.
5. Review Salaried Employees
Do not assume salaried workers are exempt from minimum wage risk. Additional hours and changes to working patterns can create compliance issues over time.
6. Maintain Accurate Records
Employers are legally required to retain sufficient records demonstrating National Minimum Wage compliance. For periods covered by the current rules, these records generally need to be retained for at least six years.
7. Investigate Issues Promptly
Where a potential shortfall is identified, employers should establish:
- Who is affected
- How the issue occurred
- What arrears are owed
- What process changes are needed
Addressing discrepancies early can prevent isolated errors from becoming widespread compliance issues.
Why This Matters for Every Employer
The latest naming round demonstrates that National Minimum Wage compliance involves more than simply paying a rate above the legal minimum.
Qualifying pay, working time, deductions, expenses and payroll calculations must all be considered together.
Even organisations with established payroll functions can encounter technical compliance issues if systems, processes or calculations are not reviewed regularly.
For employers operating variable shifts, overtime arrangements, salary sacrifice schemes or multiple pay enhancements, regular payroll reviews are particularly important.
How The Infinity Group can help
At The Infinity Group, we help businesses ensure their payroll is processed accurately, efficiently and in compliance with payroll and tax regulations .
Whether you wish to remain the employer and outsource your payroll administration through our Payroll Management, , or prefer us to act as the employer through our Umbrella Payroll Service , we can provide a solution tailored to your requirements.
Our experienced team supports businesses with accurate payroll calculations, deductions, reporting and compliance, helping to minimise the risk of errors and giving you greater confidence in your payroll processes.
If you would like to review your current payroll arrangements or discuss the most suitable option for your business, contact The Infinity Group today.