Data obtained by TWM Solicitors has shown that HMRC received 7,622 tip-offs from whistleblowers about employers failing to pay staff the National Minimum Wage (NMW) last year. The company found reports received by HMRC about employers failing to meet regulations has grown every year for five years and is now 360 per cent higher than it was in 2020/21.
Andrew Peters, Partner in the Employment Law team at TWM Solicitors, says tip-offs are likely to rise further as employers face increasing cost pressures, including the recent sharp increase in employers’ National Insurance contributions.
In addition, the National Living Wage for those aged 21 and over rose to £12.71 per hour on 1 April 2026. The rate for 18–20-year-olds also increased to £10.85, while the rate for 16–17-year-olds and apprentices rose to £8.00.
“We expect more businesses to be reported for failing to pay the National Minimum Wage as cost pressures on employers continue to grow,” explains Peters. “It’s clear that many businesses in sectors like retail and hospitality, where starting salaries are just above the NMW, are under particular pressure to keep their payroll costs down.”
TWM says the number of whistleblower-initiated investigations carried out by HMRC into minimum wage violations rose 24.8 per cent to 1,137 last year. HMRC also issued 335 penalties totalling £2.4m, compared with 332 penalties worth £1.7m the previous year.
HMRC can fine employers up to 200 per cent of the underpayment for breaches of minimum wage regulations and regularly ‘names and shames’ employers found to have breached minimum wage rules.
Peters says it is easy for businesses to fall foul of the minimum wage rules without even realising. For example, workers’ pay can fall below the minimum wage if their employer deducts costs such as lunch, travel expenses, parking permits and uniforms from their salaries.
Additionally, employers can breach minimum wage rules by failing to pay workers for the correct amount of time they worked. These errors can occur, for example, due to rounding clock-in times, underpaying travel time, or paying workers day rates or ‘regular’ hours despite them working longer hours.
“Employers can easily fall foul of the National Minimum Wage Regulations without realising it and suddenly find themselves facing fines and public ‘naming and shaming’,” he says. “To minimise the risk of this happening, employers should carry out regular payroll audits to ensure they remain compliant.”
