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HMRC internal manual

National Minimum Wage Manual

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HM Revenue & Customs
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Issuing notices of underpayment: enforcing payment of arrears

Relevant legislation

The legislation that applies to this page is as follows:

  • National Minimum Wage Act 1998, sections 17, 18, 19, 19A, 19D, 19E, 31, 32 and 33

Worker makes own claim

If a worker believes he has not been paid the national minimum wage, he may commence proceedings against his employer to recover arrears in either:

  • the employment tribunal (in Northern Ireland, the industrial tribunal) - as an unlawful deduction from wages claim or a breach of contract claim, or
  • the County Court (in Scotland, the Sheriff Court) - as a breach of contract claim.

There are time limits for a worker wanting to make his own claim which they should check with the respective court or with an independent legal adviser.

If a worker takes their own claim to a tribunal or court, HM Revenue & Customs cannot also enforce a complaint on their behalf.

Complaints to HM Revenue & Customs

A worker who is not taking his own claim may make a complaint to HM Revenue & Customs that he has not been paid the national minimum wage by his employer. A NMW Officer may then investigate the complaint and may also look at the entitlement of other workers employed in the same or other businesses of the employer. The purpose of the investigation is to determine whether or not the employer has complied with his statutory duty to pay workers at least the national minimum wage.

If a NMW Officer considers that national minimum wage arrears were outstanding on the date of contact at the start of an investigation, he can issue a notice of underpayment (NMWM13030) setting out the arrears owed to individual workers and imposing a penalty. If the employer subsequently fails to pay all the arrears of national minimum wage set out on the notice and/or the penalty and has not submitted an appeal against the notice, HM Revenue & Customs will consider enforcing any outstanding arrears through either:

  • civil enforcement action, or
  • criminal prosecution, for more serious cases of non compliance.

Risk assessed and targeted enforcement cases

HM Revenue & Customs will also investigate selected employers identified as being at risk of non compliance. These cases will include the targeted enforcement of key low paying sectors as announced by the Department for Business, Innovation & Skills (NMWM02020). This type of case will be investigated and outstanding arrears enforced in the same way as cases involving worker or third party complaints. Sectors which have been previously selected for targeted enforcement include: