In a significant move towards enforcing workers’ rights, the UK Government has named and shamed nearly 500 employers for failing to pay the National Minimum Wage (NMW), issuing over £10.2 million in penalties and returning £6 million to affected employees.
This crackdown, part of the Government’s broader Plan to Make Work Pay, represents the most robust enforcement of employment law in a generation.
With a new Fair Work Agency set to launch in 2026 and the Employment Rights Bill bringing sweeping reforms, now is the time for both employers and employees to understand the implications of wage compliance failures.
Why Are UK Employers Being Fined for Underpaying Staff?
The UK Government has recently intensified efforts to enforce wage laws, holding employers accountable for underpaying workers. In October 2025, nearly 500 businesses were named and fined more than £10 million by the Department for Business and Trade (DBT) for failing to comply with National Minimum Wage (NMW) laws.
This crackdown led to the repayment of £6 million to around 42,000 employees. This initiative is part of the Government’s broader “Plan to Make Work Pay”, designed to safeguard fair treatment and earnings for UK workers.
Employers found to be underpaying even by technical errors, such as unpaid training hours or uniform deductions, were not spared. The message is clear: any breach of wage law, intentional or not, will face consequences.
What Is the National Minimum Wage and Who Sets It?
The National Minimum Wage (NMW) is the legal minimum an employer must pay workers based on their age or employment status. The National Living Wage (NLW) applies to workers aged 21 and over, while different rates exist for younger workers and apprentices.
Each year, wage thresholds are reviewed by the Low Pay Commission, which advises the Government on changes that reflect inflation and living costs.
Here is a table illustrating the NMW and NLW rates for 2024 and 2025:
| Age Group | 2024 Rate | 2025 Rate |
| National Living Wage (21+) | £11.44 | £12.21 |
| 18 to 20 Year Olds | £8.60 | £10.00 |
| Under 18 | £6.40 | £7.55 |
| Apprentices | £6.40 | £7.55 |
Failing to comply with these rates, whether by oversight or cost-cutting, is a legal violation and carries significant financial and reputational penalties.
Which Companies Have Been Named and Shamed?
Among the 491 companies recently exposed by the Government for wage breaches, several high-profile names stood out. These include well-known brands across the retail, hospitality, and recruitment sectors.
High-Profile Offenders and Underpayments
- Euro Garages Limited: £824,384 underpaid to 3,317 workers
- Red Contract Solutions Ltd: £652,395 underpaid to 11,631 workers
- Go Outdoors Retail Limited: £240,105 underpaid to 2,058 workers
- Centrica PLC (British Gas owner): £167,815 underpaid to 356 workers
- Holland & Barrett Retail Ltd: £153,079 underpaid to 2,551 workers
These figures highlight systemic issues in payroll practices, particularly around unpaid onboarding, uniform costs, and salary sacrifice schemes.
Sectors Most Affected by Wage Violations
The most affected industries include:
- Retail chains and supermarkets
- Hospitality and catering services
- Recruitment and staffing agencies
- Childcare and nursery providers
These industries often employ large numbers of hourly and part-time workers, making them more vulnerable to unintentional or deliberate wage breaches.
How Much Have Workers Been Repaid So Far?
According to the Department for Business and Trade, around £6 million has been returned to underpaid workers. This repayment covered backdated wages over a period of up to six years, in line with the legal entitlement of affected employees.
Breakdown of Compensation
| Category | Total Value |
| Number of Employers Fined | 491 |
| Total Fines Imposed | £10.2 million |
| Repaid to Workers | £6 million |
| Number of Workers Affected | Approximately 42,000 |
These numbers reflect the scale of non-compliance and the government’s renewed commitment to wage law enforcement.
How Many Workers Were Affected Across the UK?
Approximately 42,000 workers have already received repayments, and the number may rise as more cases are investigated or employees step forward.
What Role Does the New Fair Work Agency Play?
The Fair Work Agency, launching in April 2026 under the Employment Rights Bill, will play a pivotal role in strengthening enforcement of workers’ rights across the UK.
Its primary functions include investigating breaches of minimum wage, holiday pay, and sick pay, while consolidating enforcement roles that were previously divided among multiple agencies.
The agency will also have the power to name and shame employers who underpay staff, impose fines, and mandate repayment, ensuring that workers receive what they are owed.
By centralising regulatory authority, the Fair Work Agency will make it significantly easier for employees to report violations and for the government to respond swiftly. This reform marks a major step in protecting workers and promoting fair treatment across all sectors.
How Can You Check If You’re Being Underpaid?
Understanding whether you’re being paid the correct wage starts with awareness of your rights and knowing where to verify your salary. Even small oversights, such as deductions for uniforms or missed payment increases, can breach minimum wage laws.
The government provides a dedicated online tool at gov.uk/checkyourpay to help you check your wage status based on your age, job type, and hours worked.
Common Reasons for Underpayment:
- Employers failing to update your pay when wage rates rise in April
- Time spent on unpaid training or mandatory meetings
- Not being paid for full hours worked, such as preparation or closing shifts
- Deductions for uniform or equipment costs
If any of these apply to your situation, it’s crucial to take action quickly.
What Should You Do If You Suspect Wage Underpayment?
If you believe your employer is underpaying you, there are clear steps to follow. The law protects your right to raise concerns, and several government-backed agencies provide support.
Step-by-Step Guidance:
- Speak Informally with Your Employer: Discuss the issue with your manager or HR and show your evidence.
- Report to HMRC: Contact the Pay and Work Rights Helpline; you can stay anonymous.
- Seek Support from Acas: Get free guidance on complaints and resolving disputes.
- File a Formal Complaint or Tribunal Claim: As a last step, claim through an employment tribunal for up to six years of underpayment.
Following these steps helps ensure your rights are protected and increases your chances of recovering owed wages.
Are There Consequences Beyond Financial Penalties for Employers?
Yes. The reputational impact of being publicly listed as a wage law violator can be severe, especially for high-street brands and corporations.
Many companies issued public statements to clarify or distance themselves from historical payroll errors, highlighting how much damage being named and shamed can cause.
For instance:
- EG Group acknowledged errors between 2015–2019 and took remedial action
- Centrica cited technical payroll issues, mainly around salary sacrifice
- Holland & Barrett stated the underpayment was related to legacy practices
These admissions, though mitigated by rectification efforts, still carried public backlash and scrutiny.
How Does This Crackdown Protect Law-Abiding Businesses?
This action isn’t just about punishing non-compliance, it’s also about supporting businesses that follow the law. Companies that pay their workers fairly shouldn’t be disadvantaged by others cutting corners.
By ensuring compliance across the board, the Government aims to:
- Create a level playing field for all employers
- Encourage ethical employment practices
- Boost employee trust and engagement
Employers who comply not only avoid fines but also benefit from stronger workforce morale and public confidence.
Conclusion
The Government’s crackdown on employers fined for underpaying staff sends a powerful message: compliance with wage laws is not optional. With over 42,000 workers compensated and more than £10 million in penalties issued, this enforcement wave reflects a significant shift toward greater protection for employees.
As a UK worker, it’s your right to receive a fair day’s pay for a fair day’s work. And as an employer, it’s your legal duty to uphold wage laws transparently and consistently.
With the upcoming Fair Work Agency and enhanced enforcement under the Employment Rights Bill, the UK is entering a new era of accountability, one where workers are empowered, and ethical businesses are no longer undercut.
Frequently Asked Questions
What is the difference between National Minimum Wage and National Living Wage?
The National Living Wage applies to workers aged 21 and over, while the National Minimum Wage applies to younger workers and apprentices, with different legal pay rates.
Can deductions make my wage fall below the legal minimum?
Yes. Deductions for uniforms, tools, or training can reduce your take-home pay. If these bring your earnings below minimum wage, your employer is in breach of the law.
How far back can I claim underpaid wages?
You can claim unpaid wages going back up to six years in England and Wales, and five years in Scotland, from the date of the breach.
What protections exist if I raise a complaint against my employer?
The law protects you from retaliation if you report underpayment. This includes protection from dismissal, demotion, or unfair treatment.
Do apprentices have different wage rights?
Yes. Apprentices under 19 or in their first year are entitled to a lower wage. After the first year, they must be paid at least the minimum wage for their age group.
Are employers penalised even if the underpayment was unintentional?
Yes. Intent doesn’t exempt employers from penalties. Even administrative errors can lead to fines and mandatory repayment.
Where can I get free help if I suspect underpayment?
Visit gov.uk/checkyourpay or contact Acas for confidential support. You can also report your employer directly to HMRC.
