If an employer pays less - National Minimum Wage

If an employer pays less

It's against the law for an employer to pay less than the National Minimum Wage or National Living Wage.

They also must keep accurate pay records and make them available when requested.

If an employer has not been paying the correct minimum wage, they should resolve the problem as soon as possible.

The employer must also resolve any backdated non-payment of minimum wage. This is even if the employee or worker no longer works for them.

Resolving the issue informally

It can resolve the issue quickly if the employer and employee or worker are able to talk informally about it.

To check if someone has been getting the right pay, you could:

Find out more about:

Formal processes for non-payment of minimum wage

If minimum wage is not being paid, the employee or worker can raise the problem formally.

This could be by raising a grievance – making a formal complaint to the employer. This can help get the issue resolved without needing legal action.

Or they can do one of the following:

  • complain to HM Revenue and Customs (HMRC)
  • make a claim to an employment tribunal

If you have questions about minimum wage, or are not able to resolve an issue, contact the Acas helpline.

How HMRC enforces payment of minimum wage

If someone has not been paid the minimum wage, they can make a complaint to HMRC.

Complaints to HMRC can be anonymous. Third parties can also make a complaint, such as a friend, family member or someone the person works with.

If HMRC finds that the employer has not paid the minimum wage, action they can take against the employer includes:

  • issuing a notice to pay money owed, going back a maximum of 6 years
  • issuing a fine of up to £20,000 and a minimum of £100 for each employee or worker affected, even if the underpayment is worth less
  • legal action including criminal legal proceedings
  • passing on the names of businesses and employers to the Department for Business and Trade (DBT) who may put them on a public list

To make a complaint to HMRC, either:

If the employee makes a claim to an employment tribunal

If an employee or worker has not been paid the minimum wage, they can make a claim to an employment tribunal.

They must choose either to do this or to complain to HMRC. They cannot take the same issue through 2 legal processes.

How much money an employee or worker can claim will depend on the type of claim they make. For example, if they make a claim for non-payment of minimum wage, they can claim for money owed going back 2 years.

There are strict time limits for someone to make a claim to an employment tribunal: 

  • if there was one wrong deduction, they have 3 months minus 1 day from that deduction
  • if there were several wrong deductions in a row, they have 3 months minus 1 day from the most recent wrong deduction

An employee can claim up to 2 years back as long as either of the following apply:

  • there's less than 3 months between deductions
  • the deductions are linked – for example, they might be linked if they are caused by the same error

Find out more about:

Protection against being treated less favourably because of minimum wage

An employer must not cause someone 'detriment' if they:

  • become entitled to a higher rate of minimum wage
  • assert their right to minimum wage
  • make a complaint to HMRC or a claim to an employment tribunal

Detriment means someone experiences one or both of the following:

  • being treated worse than before
  • having their situation made worse

Examples of detriment could be:

  • their employer reduces their hours
  • they experience bullying
  • they experience harassment
  • their employer turns down their training requests without good reason
  • they are overlooked for promotions or development opportunities

If someone thinks they've experienced detriment because of minimum wage entitlement, they might be able to make a claim to an employment tribunal.

Last reviewed