Errors in Applying National Minimum Wage

Employers should now be applying the new National Minimum Wage (NMW) or National Living Wage (NLW) rates which came into force on 1 April 2017. The penalties for breaching minimum wage legislation are severe - 200% of the arrears owed to employees – so it’s essential to remain compliant.

Even those employers who are aware of the new rates and intend to comply may inadvertently break the rules. HMRC have highlighted some of the common errors employers make:

  • Not paying the correct rate – this is easily done when an employee’s birthday moves them to a new category.
  • Making deductions from wages which reduce the employee’s wage below the NMW/NLW rate. Care needs to be taken with salary sacrifice arrangements in particular.

  • Including top ups to pay that do qualify for NMW/NLW.

  • Failing to classify workers correctly.

  • Failing to include all the time an employee is working.

The new rates for NMW/NLW are shown below.


25 and over

21 to 24

18 to 20

Under 18


April 2017







If you have any concerns in relation to National Minimum Wage or National Living Wage, please contact Sarah Hughes