Employers must make sure their staff receive at least the National Minimum Wage or National Living Wage rate that applies to them. The correct rate depends on the worker's age and, in some cases, whether they are an apprentice.

Since 1 April 2026, workers aged 21 and over are entitled to the National Living Wage of £12.71 an hour. The rate for workers aged 18 to 20 is £10.85, while workers under 18 are entitled to minimum of £8 an hour. 

Apprentices also have a minimum rate of £8 an hour, but this does not apply throughout their apprenticeship. An apprentice is entitled to the apprentice rate if they are under 19, or if they are 19 or over and in the first year of their apprenticeship.

Once an apprentice aged 19 or over has completed the first year of their apprenticeship, they become entitled to the minimum wage rate for their age. For example, a 21-year-old apprentice in their first year is entitled to £8 an hour, but after completing that first year they must receive at least £12.71 an hour.

Employers who fail to pay the minimum wage can face significant financial penalties. HMRC can require arrears to be repaid and impose penalties of up to 200% of the underpayment, subject to the applicable rules. Serious cases can also result in criminal prosecution.

Employers should therefore review rates regularly, particularly when employees have a birthday or apprentices reach the end of their first year.

The minimum wage rates change every 1 April, so payroll systems should be updated promptly to avoid underpayments.

The Government has named nearly 660 employers for failing to pay workers the National Minimum Wage, highlighting how costly National Minimum Wage compliance failures can become.

The latest naming round, published on 3 September 2026, involved around £4 million being repaid to more than 27,000 workers. Employers were also issued with penalties totalling £7 million.

The key point for employers is that minimum wage compliance is not simply a matter of comparing an employee's hourly rate with the statutory minimum.

For workers aged 21 and over, the National Living Wage is £12.71 an hour from April 2026. The rate is £10.85 for those aged 18 to 20 and £8.00 for workers under 18 and qualifying apprentices.

Problems can still arise where the stated hourly rate appears correct.

Employers need to consider the actual pay received for minimum wage purposes and all working time. Certain deductions can reduce minimum wage pay, while unpaid activities such as opening or closing premises, compulsory training, changing into required clothing or carrying out security checks can also create problems.

Errors may also arise where employees are expected to buy items connected with their employment.

Small mistakes repeated across several employees and over a period of time can therefore become significant liabilities.

Employers who underpay workers may have to repay arrears and face financial penalties. Public naming can also cause reputational damage.

This is a good time to carry out a simple review.

Check payroll rates, particularly after birthdays that move younger employees into a higher age band. Review deductions, working-time arrangements and any employee expenditure connected with work.

Businesses employing apprentices should also make sure the apprentice rate is being used correctly.

Most employers intend to pay staff properly. The difficulty is that the rules are more complex than they first appear.

A short review now could identify an innocent error before it becomes an expensive one.