Cengolio · Fines · Minimum wage penalty
Minimum wage penalty
Underpaying the minimum wage is priced by statute: the penalty is 200% of the shortfall, capped at £20,000 for each worker and never below £100 a notice — and it halves when everything is settled inside 14 days. The repayment itself can grow on the way back: arrears are repaid at today's rate, not the rate of the year they were missed.
Percentage, per-person cap, floor, the 14 days and the six years as in ss. 103–108 Employment Rights Act 2025, in force for minimum wage notices since 7 April 2026, read against the enacted text 22 July 2026 · legislation.gov.uk
Since 7 April 2026 the notice comes from the Secretary of State's Fair Work Agency, not HMRC: the Employment Rights Act 2025 switched the old machinery of the 1998 Act off, with savings for notices already in flight. The notice can reach back six years, s. 105(2), and arrears for old years are repaid at the current rate for the worker's age band where that is higher — s. 17 of the 1998 Act, which survives, and the uplift in the columns above.
The worst cases can end in criminal proceedings — s. 109 suspends the penalty precisely while they run — and none of that is arithmetic. Whether a shortfall exists at all — accommodation offset, deductions, working time — is where advice belongs.
Money owed to HMRC as tax runs on different meters; the PAYE late payment calculator prices those.