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HMRC internal manual

National Minimum Wage Manual

HM Revenue & Customs
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Issuing notices of underpayment: notifying workers of their arrears

When a notice of underpayment is issued, those workers with outstanding arrears who were contacted during the course of the investigation (NMWM13100), should be advised in a letter:

  • that the NMW Officer considers their employer (or former employer) owes them arrears of national minimum wage;
  • the period of arrears as shown on the notice and the outstanding amount;
  • that the arrears should be paid less any tax and/or NICs due;
  • that the employer has four weeks to pay any outstanding arrears from the date of service of the notice;
  • that they should inform the NMW Officer whether or not they have been paid by that date;
  • that if the employer does not pay, we may start civil proceedings to recover the arrears on their behalf and if so, that they may be asked to attend as a witness;
  • that the employer has a right of appeal against the notice to an employment tribunal, that they will be advised if this happens and, if so, that they may be asked to attend as a witness;

The worker is advised of the arrears outstanding at the date the letter is issued (not the arrears outstanding at the date of contact). This takes into account any payments the employer has paid to the worker since the date of contact and therefore advises the worker of the amount he is still due to be paid.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If the employer has paid some of the worker’s arrears since the date of contact, show in the letter:

  • the outstanding arrears at the date the letter is issued, but
  • the full period for which arrears were identified (as detailed on the notice of underpayment).

For example:

  • A notice of underpayment shows a worker was owed £50 arrears for May and £50 arrears for June on the date of contact. The worker’s pay reference periods run from the start to the end of each month. The employer paid the worker £25 on the date of contact and £75 is still outstanding when the worker is notified of his arrears.

The letter notifying the worker of his arrears will show he has outstanding arrears of £75 for the period 1 May to 30 June for the year in question.

Employer has paid all a workers arrears when notice issued

Do not issue this letter to a worker named on the notice if there are no outstanding arrears for that worker.

Deceased worker named on notice

If a deceased worker is named on a notice, write to their Personal Representative informing them about the arrears due to the worker’s estate (NMWM13260).