The Fair Work Agency (“FWA”) released their latest “name and shame” list this month, naming employers who have underpaid their workers National Minimum Wage (“NMW”), listing 660 employers who have fallen short of the NMW requirements.
As a result, around £4million has been returned to over 27,000 workers, with accompanying penalties of £7million, alongside the inevitable negative publicity.
The naming and shaming list is not a new concept by any means, as it has been used as a tool to deter employers from falling short since 1 January 2011. However, the most recent list provides employers with a firm reminder that failing to meet one’s obligations to pay the NMW can result in severe consequences – a Notice of Underpayment to pay the underpaid workers), penalties of up to 200% (detailed below), and the publication of the underpayment.
The condensed list does not immediately set out what the underpayment relates to, simply listing the name of the employer, their address, how much they failed to pay, and how many workers were impacted. However, the detailed breakdown identifies the most prominent sectors that have fallen short in this round of naming, which includes retail, administrative and support services (employment agencies, business support services, security and cleaning services), human health and social work activities (hospitals, child daycare, dental practices, social work/elderly and disabled care), education, accommodation, food service and construction.
Further details on the reasons for minimum wage underpayments are set out in HMRC’s Educational Bulletin 24. In summary, they relate to the usual suspects – deductions in salary (including salary sacrifice schemes and other savings schemes, uniform / worker purchase of clothes to meet dress code), training costs, food/meals, parking permits/travel costs), unpaid working time (additional work undertaken before or after a shift, unpaid travel time, delayed pay or not being paid for overtime). In addition, a key area is employers failing to increase worker pay when they become eligible for a higher rate, failing to correct rates due to apprentices, incorrectly categorising their workers or applying the wrong worker type when calculating NMW.
This is the first name and shame list issued since the FWA was set up in April 2026 – a new enforcement body formed after the enactment of the Employment Rights Act as a “streamlined place where employers will be able to get guidance on how to follow the rules”. This is a notable shift in NMW enforcement, which was previously headed by HMRC.
The FWA enforcement statement (updated on 26 August 2026) has now superseded HMRC’s previous enforcement policy, which employers should follow going forward. We set out below the key changes mentioned in the FWA enforcement policy and what employers need to look out for.
Much like HMRC, the FWA will identify non-compliance through a range of sources, in particular complaints from workers or via referrals from other public bodies. In deciding whether further investigation is necessary, it will weigh up the cause of the complaint, non-compliance with the legislation, the seriousness of the breach, etc. Notably, FWA enforcement officers have statutory powers under the Employment Rights Act 2025 and depending on the nature of the investigation, the officers may (by notice) require a person to attend at a specified time and place and to provide information by answering questions. The FWA will also consider if a criminal offence (under sections 140 – 142 of the Employment Rights Act 2025) is applicable, including obstruction (withholding information without a reasonable excuse) or providing false documents.
Importantly, the FWA adopt a different approach when it comes to civil penalties. In summary, the direction has broadly the following effect:
“If, following an HMRC investigation, the only reason minimum wage was underpaid for a worker in a particular pay reference period was because the employer made a deduction from a worker’s pay or operated a salary sacrifice or savings scheme falling within the permitted categories, with the worker’s consent, and the worker has received the correct goods, services benefits or repayments as a result of that deduction or reduction (e.g. childcare vouchers, savings club, season ticket etc.), the employer will not face a financial penalty (or be named). This direction does not apply to deductions for items: – in connection with employment – for example, a uniform – expenses – accommodation” (emphasis added)
Accordingly, there is now a clear shift in the approach to enforcement to NMW disputes and underpayments. On one hand, enforcement can be more stringent, with potential for unannounced visits, powers to obtain information and evidence as necessary, and requiring a person to attend a specified time and place to provide information. However, the FWA is guided by the principle of proportionality (considering the degree of risk and harm to workers by the employer when looking at breaches), consistency and transparency. This is reflected in the Secretary of States’s direction when it comes to salary sacrifice schemes and penalties, and if an employer can demonstrate that it meets the necessary conditions, a financial penalty can be avoided.
What does this mean for employers?
The publication of the latest naming list, combined with the establishment of the FWA, sends a clear message; NMW compliance is under greater scrutiny than ever before, and the consequences of falling short extend beyond financial penalties.
The latest list demonstrates that employers from all sectors – from large household-name retailers to small hospitality businesses and care providers – must be diligent when it comes to compliance. The breadth of employers named demonstrates that often NMW breaches do not derive from deliberate wrongdoing; many arise from administrative oversights, misclassification of workers, or pay arrangements such as salary sacrifice schemes which amount to a deduction of pay.
Practical steps:
- Audit pay arrangements: Review all deductions from workers’ pay, including salary sacrifice schemes, uniform costs, and training charges, to ensure they do not bring any worker’s hourly rate below the NMW.
- Check worker classifications and rates of pay: Ensure all workers are correctly categorised (worker, apprentice, etc.) and that the correct NMW rate is being applied, particularly when workers move between age bands or apprenticeship stages and after rates of pay have increased.
- Review working time records: Ensure time-recording systems capture all time worked, that workers are correctly reporting their working hours, and the relevant records are retained for at least six years.
- Follow published guidance: Under the new FWA enforcement policy, employers who have sought and correctly followed written government guidance may avoid financial penalties even where an underpayment is found. Keep records of any guidance obtained and evidence how it was applied.
- Act promptly if a breach is identified: Penalties are reduced by 50% if arrears and half the penalty are paid within 14 days of a Notice of Underpayment. Early remediation can significantly reduce financial and reputational cost.
The latest round of naming is a timely reminder that NMW regulations and enforcement should not be underestimated. In an era of heightened scrutiny of employment practices, appearing on the naming list can have lasting consequences to an employer’s reputation and brand, the ability to recruit, and relationships with clients and stakeholders. Proactive compliance is always preferable and now a key factor in determining whether a penalty of up to 200% will be issued.
If you have any questions about any of the information in this article, please do not hesitate to reach out to our Tax Disputes and Investigations or Employment teams.
