80 of the named businesses are based in the Midlands. They accounted for £1,037,242.27 of the National Minimum Wage (NMW) and National Living Wage (NLW) arrears and affecting 7,966 employees, according to research by top 10 UK accountancy and advisory firm Azets.

It shows that there is no de minimis limit for when payment of arrears due to workers is required or for publication of employer details, with HMRC naming employers where the underpayment averaged only 3p per worker, per week. 

Clair Williams, Head of Employment Tax at Azets, with regional offices in Birmingham, Wolverhampton, Coventry, Nottingham & Tamworth, said: “There is simply no margin for error, as our research shows.

“Even if you are only underpaying a worker by 3p per week, this is enough to put your business on HMRC's radar.”

Non-compliance can have serious consequences, including:

●      Penalties of up to 200% of the underpayment (capped at £20,000 per worker), as well as underpaid workers having to be paid what they’re owed.

●      Reputational damage from being publicly named by HMRC.

●      Potential increased likelihood of future HMRC investigations.

The latest name-and-shame list, published by HMRC, covered NMW investigations that concluded between 2015-2022 and shows 518 employers which failed to comply with the NMW and NLW regulations.

One example includes one employer failing to pay a total of £478,282.71 to 41 workers.

Clair said: “Ensuring that workers receive the pay they are legally entitled to has been a key priority for HMRC in recent years.

“Employers suspected of non-compliance, even if it is a minor miscalculation, have been subject to targeted investigations and enforcement campaigns. These actions are designed to drive awareness, encourage self-correction and deter future breaches.”

The newly released list highlights significant figures:

●      518 employers have been named for underpaying staff.

●      A total of £7.4 million in wages was found to have been underpaid.

●      Nearly 60,000 workers were impacted by the underpayments.

“These figures underline both the scale of the issue and the importance of getting national minimum wage compliance right,” said Clair.

While most employers do not intentionally underpay their workers, the rules surrounding NMW and NLW can be complex.

Common pitfalls include:

●      Failing to pay for all working time (e.g. training, travel, waiting time).

●      Deductions from wages that reduce pay below the minimum threshold, including salary sacrifice arrangements.

●      Misclassification of workers or misunderstanding of age-related wage bands.

●      Incorrect calculations related to salary sacrifice or accommodation offsets.

Clair said: “It is essential that employers in the Midlands remain compliant, from reviewing employment contracts and working practices to ensure all time worked is accounted for, to conducting regular internal audits of pay structures and payroll data, and ensuring correct NMW worker categorisation.

“Employers need to stay informed about annual changes to minimum wage rates and also train HR and payroll teams to recognise potential risk areas.

“Seek expert advice where there is uncertainty because even underpaying a worker by 3p per week has serious consequences; unintentional breaches do not amount to an acceptable excuse for HMRC. With minimum wage rates rising each year, maintaining compliance must be an ongoing process.”

Azets carries out comprehensive NMW/NLW health checks for clients, helping identify and address any areas of concern.

The firm’s Employment Tax team are also on hand to support companies facing an enquiry, which can be disruptive and costly.