On 7 April 2026, the Fair Work Agency will be formally established and will eventually take over enforcement of the National Minimum Wage from HMRC. With less than three weeks to go until a new state enforcement regime is set up, now is a good time to pause and get ahead of things.

Today, HMRC published its list of employers found to have breached minimum wage laws. This is potentially the last list under the current HMRC-led system. The next one could be published by the Fair Work Agency. Today’s naming list shows:

389 employers named.

£7.3 million in arrears.

£12.6 million in penalties.

Well-known brands appear on the list. But in most cases, employers haven’t deliberately underpaid employees. They’ve been caught by technical non-compliance of the rules. For example:

  • uniform costs, other deductions and salary sacrifice arrangements pushing pay below NMW;
  • travel time, training or time on tasks before a shift starts not treated as working time when it should be; and
  • pay that looks correct overall for the year, but isn’t enough for individual pay reference periods – for example because of the way in which time off in lieu policies are operated.

Many of these issues are historic and have already been fixed. But that hasn’t prevented public naming.

The reality of NMW compliance is that it is very easy to get caught out by the detail.  The further increases to NMW and the National Living Wage coming into force on 1 April 2026 brings more employees closer to the threshold. It also increases the risk that something relatively small, like a deduction or salary sacrifice, pushes pay below it without anyone noticing.

NMW will be an early area of focus for the Fair Work Agency

The Fair Work Agency will eventually enforce holiday pay and statutory sick pay. But that will take time as new teams and new systems need to be put in place. It is likely to take over NMW enforcement much more quickly, as it will be able to inherit HMRC's existing enforcement team.

The Fair Work Agency has broad powers and flexibility in how it operates. It can:

  • investigate proactively without waiting for a complaint;
  • enter workplaces to gather information;
  • issue penalties of up to 200% of any underpayment;
  • bring employment tribunal claims on behalf of workers; and
  • look back over a six-year period.

Most of these enforcement powers already apply to NMW but will be very new for holiday pay and statutory sick pay.

Where to focus now

A short, focused review into your NMW compliance now will be far easier than dealing with an investigation later.

This doesn’t need to become a major project. In many cases, the risk sits in systems and processes rather than intent. It’s worth considering:

  • Do any salary sacrifice arrangements reduce pay below NMW in a pay period? Remember it’s post-sacrifice pay that counts.
  • Are you capturing all working time, including training and overtime?
  • Do deductions (uniforms, equipment, training) reduce pay for NMW purposes?
  • Are pay rates keeping pace with age bands and the April increase?
  • Does pay comply in each pay period, not just across the year?
  • Are you operating time off in lieu policies in a way that complies with NMW rules?

If payroll systems allow someone to fall below NMW, that risk exists whether or not anyone has spotted it yet.

If you’d like help reviewing your current pay arrangements please contact us.

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