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11th December 2023

Paying the National Minimum Wage and National Living Wage Advice

HMRC has written to more than 5,000 employers in the Cardiff area to highlight common mistakes around the National Minimum Wage (NMW) and National Living Wage (NLW), this article offers helpful advice and reminds businesses of their legal obligations regarding NMW and NLW.

Paying the National Minimum Wage(NMW) and National Living Wage(NLW) is more than just a pay rate!

Most people know about the legal requirement to pay workers at least the NMW/NLW. What most people don’t understand is that it is about much more than just the rate of pay.

In June 2022, over 200 employers were named by the Department for Business and Trade(DBT) for underpaying their workers.

The top 2 types of error were not about the rate of pay.

39% of employers had applied a deduction or made workers pay for something connected to their job and not refunded the cost.

39% of employers had not paid workers for all of their working time.

Deductions and Payments

Deductions and payments in connection with the job will almost always reduce pay for NMW purposes. These deductions could include:

  • Uniforms
  • Safety equipment
  • Food/meals
  • Training costs
  • A worker purchasing items themselves to meet a clothing requirement

Unpaid Working Time

Workers are generally considered to be working for NMW purposes if they are:

  • At work and required to be at work – this includes any time spent carrying out tasks before or after a shift is due to start or end
  • Travelling for business or training
  • Training
  • On standby at or near their place of work

Workers must be paid at least the NMW for all the working times listed above.

Benefits in Kind

This is another area of the legislation that is often where mistakes creep in.

The only benefit in kind that does not reduce pay for NMW, is accommodation. This is limited to a specific amount. In 2023/24 this is £9.10 per day/£63.70 per week.

If a worker is charged more than this, the excess will be deducted from their pay when calculating NMW.

No other benefits in kind can be used to make up a worker’s pay.


There are specific rules about when the apprentice rate can be paid, and when a worker is entitled to the correct NMW rate for their age.

The apprentice rate can only be paid if the worker is employed under a statutory apprenticeship agreement or a contract of apprenticeship.

Also, the minimum wage apprentice rate only applies if:

  • The apprentice is under the age of 19
  • The apprentice is aged over 19 and in the first year of their apprenticeship with their current employer.

What is happening in Cardiff?

HMRC has written to more than 5,000 employers in the Cardiff area to highlight common mistakes around the National Minimum Wage (NMW) and National Living Wage (NLW) – offering support to help them get it right and reminding them of their legal obligation.

In 2022/23 more than 450 workers in the Cardiff area were underpaid the National Minimum Wage by £243,000.

HMRC is also offering around 1,500 employers in Cardiff a free support call with one of our National Minimum Wage / National Living Wage experts. During these calls employers can discuss their minimum wage concerns and ask questions. HMRC can help identify any mistakes and, if needed, help put things right. If a business corrects the mistakes as a result of the support call, HMRC will not charge any penalties.

Employers have been invited, by letter, to book a support call. If you have received a letter you only have until 20 December 2023 to contact HMRC to book a call.

It is likely HMRC will be visiting employers in the Cardiff area to check NMW in 2024.

What do I do if I think there is an issue?

It is important not to let an issue continue. There is help and support available. If an issue is left, and HMRC open an investigation, employers could be liable for a penalty of 200% of arrears found and be publicly named for underpaying workers.

Go to Calculating the minimum wage – Calculating the minimum wage – Guidance – GOV.UK (www.gov.uk)

Here you can find all the information to get things right. It will also give information on how to repay workers, or to make a voluntary declaration.

You can also call Acas on 0300 123 1100 for advice. They are open 8am-6pm Monday to Friday and offer a translation service.

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