NMW regulatory enforcement 



HMRC can pursue a claim on behalf of workers in the employment tribunal to recover NMW arrears. In January 2017, HMRC launched an online complaints service to help workers lodge complaints about pay and work rights, including non-payment of the NMW: www.gov.uk/government/publications/pay-and-work-rights-complaints. Workers can also access HMRC support by calling the Acas Helpline. With the worker’s agreement, Acas can refer the complaint to HMRC NMW compliance officers.




HMRC can enter premises, inspect records, interview employers and pass information on to workers. HMRC can issue an underpayment notice requiring payment of arrears within 28 days. Employers can appeal to an employment tribunal. 


When issuing an underpayment notice, an HMRC enforcement officer must also serve a penalty notice.
 HMRC maximum fines for NMW non-payment are 200% of the total arrears. The penalty halves if arrears are paid within 14 days. The minimum and maximum amounts of the fine are £100 and £20,000 per worker. HMRC also periodically “names and shames” non-payers in a press release.


Non-payment of the NMW, failure to keep records and making false records are criminal offences. Prosecutions are rare. 





HMRC targets its enforcement activity on areas of the economy most prone to NMW abuse, such as retail, hairdressing and beauty and child care. In 2017-18, HMRC investigators recovered around £15.6 million of NMW arrears for around 200,000 workers. Unions want to see more funding, to enable HMRC to recruit more compliance officers and to conduct more targeted NMW awareness programmes, including visits to schools and colleges. 


In 2017, a new regulator, the Director of Labour Enforcement, took over strategic responsibility for NMW enforcement by HMRC. New sanctions, called Labour Market Enforcement Undertakings, are aimed at employers that persistently break employment laws, including NMW non-payment. They can carry up to two years’ imprisonment and/or an unlimited fine.


Promised measures for the future include extending the remit of the Employment Agency Standards Inspectorate (EASI) to regulate umbrella companies in the supply chain (see Chapter 2) and introducing state enforcement of holiday pay for vulnerable workers, “backed up by financial penalties”. Similar measures are being considered for statutory sick pay (see Chapter 8). The government has also promised a new single labour market enforcement agency for vulnerable workers wanting advice on their rights.