UK Act of Parliament 1998 United Kingdom

National Minimum Wage Act 1998

What this means for your business

3 obligations
1 penalties
7 guides
Enforced by
HMRC, GLAA
Applies to
United Kingdom
On this page
3 compliance obligations, 7 practical guides across 4 topics
Read full text on legislation.gov.uk

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).

Employer s.24 HMRC If a worker experiences a detriment in relation to the right not …

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.

Employer s.17 HMRC When a qualifying worker is paid at a rate below the National …

Offences and prohibitions 1

Fail to pay the national minimum wage

Unlimited fine

If 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.

Employer s.31 HMRC

Penalties for non-compliance

1 penalty under this legislation. 1 carry an unlimited fine.

Unlimited fine

Fail to pay the national minimum wage

Unlimited fine

Either way s.31 Penalises: Fail to pay the national minimum wage

Practical guidance

Our guides explain how to comply with the requirements above.

Sections and provisions

79 classified provisions from this legislation.

2 Duties 7 Offences and penalties 15 Powers 18 Definitions 10 Exemptions

Duties 2

  • s.17 Non-compliance: worker entitled to additional remuneration.
  • s.24 Enforcement of the right.

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 15

  • 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.
  • 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.19 Notices of underpayment: arrears
  • s.19F Withdrawal of notice of underpayment
  • s.19G Replacement notice of underpayment
  • s.19B Suspension of financial penalty
  • s.19D Non-compliance with notice of underpayment: recovery of 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.45A Persons discharging fines by unpaid work
  • s.45 Prisoners.
  • s.46 Relationship of this Act and agricultural wages legislation.