Keeping up with National Minimum Wage changes is essential to avoid costly breaches. Call us on 0330 123 9501 or fill in the form below for expert employment law guidance.
As NMW rates rise in 2026, employers must understand age bands, deductions, and new enforcement powers under the Fair Work Agency to stay compliant.
Employment Law & HR|24 February 2025
Insight
The National Minimum Wage was introduced in 1998 and took effect the following April, with rates rising annually since. As we approach that date in 2026 we look at what issues employers need to consider in order to act fairly and ensure that they discharge their legal responsibilities.
Managing National Minimum Wage (NMW) legislation is much more complex than simply paying a worker the correct rate per hour. This is particularly so where wages continue to rise and bring wage compression. With minimum rates catching up with higher rates of pay, employers are more prone to mistakes where deductions and employee benefits could take pay below the threshold. In 2025 over 500 employers were fined a total of £10.2 million after failing to pay correctly. In this article we review some of the rules and possible pitfalls for the unwary employer.
The new Fair Work Agency will be formally established in April 2026 and have enforcement powers dealing with breaches of SSP, NMW and holiday payments. It will have the power to enter premises, inspect documents, bring proceedings on behalf of workers, issue notices of underpayment and recover its costs in doing so.
The National Minimum Wage (NMW) is:
| Workers | From April 2025 | From April 2026 |
|---|---|---|
| 16-17 Years-old and Apprentices | £7.55 per hour | £8.00 per hour |
| 18-20 Years-old | £10.00 per hour | £10.85 per hour |
| Over 21 Years-old | £12.21 per hour | £12.71 per hour |
Unfortunately, there are several ways in which an employer can break the rules.
Reliable systems need to be in place to ensure regular monitoring, awareness and retention of records. These are all things that will be tested when the Fair Work Agency gets up to speed and we expect to see a lot of cases in due course.
Those who featured in the 2025 “named and shamed” list included Genting Casinos, Go Outdoors, Centrica PLC, Holland & Barrett Retail and Hugo Boss Ltd. If in doubt, take advice to make sure that you do not feature on the 2026 list!
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