National Minimum Wage: The Rates, and Where Employers Still Trip Up

Minimum wage compliance sounds like the simplest possible payroll task — pay at least the rate, done. In practice, it’s one of the most commonly got-wrong areas of UK employment law, and it’s now enforced by the Fair Work Agency, which we covered earlier in this series. Here’s where things currently stand, and the mistakes worth checking for.

A quick explainer of the terms you’ll see

National Living Wage (NLW) — the minimum hourly rate for workers aged 21 and over.
National Minimum Wage (NMW) — the minimum hourly rate for workers below that age band, split by age group.
Pay reference period — the period (often a week or a month) over which average pay is checked against the minimum wage, rather than every single hour needing to individually clear the rate.
Notional pay deductions — costs an employer takes from pay, or requires a worker to pay for, that can count against minimum wage compliance even if the headline hourly rate looks fine on paper.

The current rates

From 1 April 2026, the rates are:

£12.71 per hour for workers aged 21 and over (the National Living Wage)
£10.85 per hour for workers aged 18–20
£8.00 per hour for workers aged 16–17 and apprentices

These increases apply automatically — if your payroll hasn’t been checked against these figures since April, that’s the first thing worth confirming.

Where employers still get caught out

Minimum wage underpayment is rarely deliberate. It usually comes from one of a handful of well-known traps:

Uniform and equipment costs. If a worker has to buy or pay for a uniform, tools, or equipment as a condition of the job, and that cost isn’t reimbursed, it can effectively reduce their pay below the minimum wage once accounted for — even if their contracted hourly rate looks compliant.
Unpaid working time that should be paid. Time spent travelling between appointments (not just to a fixed workplace), mandatory training, and time spent on security checks or handover briefings can all count as working time for minimum wage purposes, even if it isn’t separately paid.
Salaried hours arrangements that don’t add up. Where pay is averaged across the year, actual hours worked in busy periods can quietly push the effective hourly rate below the minimum, even if annual pay looks fine.
Deductions for accommodation. There’s a specific statutory offset for employer-provided accommodation — deduct more than the permitted rate and it can breach minimum wage rules even where the cash wage itself looks adequate.
Not repaying “average” correctly for irregular hours. As we covered in our holiday pay records piece, irregular-hours and part-year workers are consistently the highest-risk group for pay calculation errors generally — minimum wage compliance is no exception.

Why this now carries more weight than it used to

As we covered in our Fair Work Agency article, minimum wage enforcement was one of the powers live from day one of the Agency’s launch in April 2026 — it’s not waiting for a later phase like holiday pay and SSP enforcement are. That means this is the area of Fair Work Agency scrutiny with the longest track record and the most established enforcement approach already in motion.

What employers should do now

Check your payroll reflects the current rates for every age band you employ.
Review whether any costs are effectively passed to workers — uniforms, tools, training costs — and whether reimbursement is needed to stay compliant.
Map out working time properly, including travel between appointments, mandatory training, and handover periods, not just scheduled shift hours.
Pay particular attention to salaried and averaged-hours arrangements, checking actual hours in peak periods against the averaged pay.
Don’t wait for an inspection to check this. As we’ve covered elsewhere in this series, the Fair Work Agency can investigate proactively, without needing a complaint first.

How Cheviot HR can help

Minimum wage compliance issues are almost always found in the detail — a uniform cost here, an unpaid travel period there — rather than in an obviously wrong headline rate. We can review your pay practices against current requirements and help you close any gaps before they’re found for you.

Get in touch at heidi@cheviothr.co.uk or visit https://cheviothr.co.uk to talk through what this means for your business.