National Minimum Wage Act 1998
What this means for your business
- Applies to
- United Kingdom
- On this page
- 3 compliance obligations, 6 practical guides across 3 topics
What you must do
3 compliance obligations under this legislation.
Management duties 1
Allow workers to bring detriment complaints to an employment tribunal
If a worker believes they have been treated unfairly for exercising their right under the National Minimum Wage Act, they can take a complaint to an employment tribunal. Your business must not block that complaint and must have a process in place to deal with any tribunal claim, including paying any compensation that may be awarded (subject to the limits set out in the Act).
Payments and fees 1
Pay any shortfall when workers are under the National Minimum Wage
If you pay a qualifying employee less than the legal minimum wage for any pay period, you must calculate the shortfall and pay the higher amount of either the difference or the statutory formula. You need to do this as soon as the under‑payment is identified and keep records of how you worked out the amount and that you paid it.
Offences and prohibitions 1
Fail to pay the national minimum wage
Unlimited fineIf you employ someone who is entitled to the national minimum wage and you do not pay them at least the minimum rate for any pay‑reference period, you commit a criminal offence. On conviction you face an unlimited fine and the case can be tried either in the Magistrates’ Court or the Crown Court.
Penalties for non-compliance
1 penalty under this legislation. 1 carry an unlimited fine.
Fail to pay the national minimum wage
Unlimited fine
Practical guidance
Our guides explain how to comply with the requirements above.
Hospitality sector market overview
Market size, growth trends, investment opportunities, and key statistics for the UK hospitality sector including employment, business counts, and economic …
The complete employment lifecycle: employer responsibilities from hire to exit
A comprehensive guide to employer responsibilities across every stage of the employment relationship, from lawful advertising and recruitment through onboarding, …
Paying the National Minimum Wage
Your obligations for minimum wage and record keeping.
Before you hire your first employee
Everything you need to do before employing your first staff member.
Keep business records after closing
Record retention requirements that continue after your business closes. Covers how long to keep tax records, employment documents, contracts, and …
National Minimum Wage, tips, and pay compliance in hospitality
How to ensure NMW compliance in hospitality, covering the accommodation offset, why tips cannot count towards minimum wage, unpaid trial …
Sections and provisions
79 classified provisions from this legislation.
Duties 2
Offences and penalties 7
- s.22E Withdrawal of penalty notice
- s.22F Replacement of penalty notice with notice imposing lower penalty
- s.22C Effect of replacement on penalties where section 22A(3) not applied
- s.22 Appeals against penalty notices.
- s.31 Offences.
- s.32 Offences by bodies corporate etc.
- s.33 Proceedings for offences.
Powers 16
- s.1 Workers to be paid at least the national minimum wage.
- s.2 Determination of hourly rate of remuneration.
- s.3 Exclusion of, and modifications for, certain classes of person.
- s.4 Power to add to the persons to whom section 3 applies.
- s.6 Referral of matters to the Low Pay Commission at any time.
- s.7 Referrals to, and reports of, the Low Pay Commission: supplementary.
- s.8 The Low Pay Commission.
- s.9 Duty of employers to keep records.
- s.10 Worker’s right of access to records.
- s.12 Employer to provide worker with national minimum wage statement.
- s.16 Information obtained by agricultural wages officers.
- s.19A Notices of underpayment: financial penalty
- s.41 Power to apply Act to individuals who are not otherwise “workers”.
- s.42 Power to apply Act to offshore employment.
- s.49 Restrictions on contracting out.
- Schedule 1 The Low Pay Commission
Definitions 18
- s.5 The first regulations: referral to the Low Pay Commission.
- s.13 Appointment of officers.
- s.15 Information obtained by officers.
- s.16A Disclosure of information by officers
- s.19D Non-compliance with notice of underpayment: recovery of arrears
- s.19B Suspension of financial penalty
- s.19F Withdrawal of notice of underpayment
- s.19G Replacement notice of underpayment
- s.19 Notices of underpayment: arrears
- s.34 Agency workers who are not otherwise “workers”.
- s.35 Home workers who are not otherwise “workers”.
- s.36 Crown employment.
- s.40 Mariners.
- s.48 Application of Act to superior employers.
- s.50 Publicity.
- s.51 Regulations and orders.
- s.54 Meaning of “worker”, “employee” etc. employee contract of employment
- s.55 Interpretation. civil proceedings industrial tribunal notice
Exemptions 10
- Schedule 2 Amendments relating to remuneration etc of agricultural workers
- s.14 Powers of officers.
- s.19C Notices of underpayment: appeals
- s.23 The right not to suffer detriment.
- s.26 Right of employee not to be unfairly dismissed: Northern Ireland.
- s.44A Religious and other communities: resident workers.
- s.44 Voluntary workers.
- s.45 Prisoners.
- s.45A Persons discharging fines by unpaid work
- s.46 Relationship of this Act and agricultural wages legislation.