National Living Wage and National Minimum Wage: government evidence on compliance and enforcement 2019 to 2020 (PDF)
Source: data.gov.uk (2022-05-23)

National Living Wage and National Minimum Wage: government evidence on compliance & enforcement. This report looks at the government’s evidence and analysis on the enforcement of National Minimum Wage and National Living Wage. This evidence helps monitor, evaluate and review minimum wage compliance and enforcement. It also has our response to the 2020 Low Pay Commission recommendations.   This evidence covers: 
estimated non-compliance with the minimum wage
routes to HMRC enforcement
enforcement operations
enforcement statistics

February 2021 
NATIONAL LIVING WAGE 
AND NATIONAL MINIMUM 
WAGE 
Government evidence on compliance and 
enforcement 2019/20  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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National Minimum Wage: 2019/20 Enforcement Statistics 
3 
Introduction & report outline 
This summary report outlines the government’s enforcement of the National Minimum 
Wage across the 2019/20 financial year.  
 
Following previous years, 2019/20 saw record results… 
HMRC closed more than 3,300 cases, compared to 3,000 in 
2018/19, with nearly 1,300 closed with arrears 
£20.8 million in arrears were identified, for over 263,000 
workers 
HMRC issued almost 1,000 penalties, a similar amount to the 
previous year, but with a higher total of £18.5 million 
Targeted enforcement continued to rise, accounting for 65% of 
closed cases, 10% points higher than in 2018/19 
HMRC follow a ‘Promote, Prevent and Respond’ approach, using a variety of techniques 
to promote awareness… 
        
Over 500,000 
mass emails 
opened 
Over 3,500 views 
of live Minimum 
Wage content 
(including 
webinars) 
6,600 views of 
pre-recorded 
Minimum 
Wage content 
235,000 SMS 
related search 
activity 
…supplemented by BEIS media campaign and employer guidance, 
resulting in nearly 900,000 employers and workers directed to seek 
further information. 

National Minimum Wage: 2019/20 Enforcement Statistics 
4 
This report provides an overview of minimum wage enforcement activity throughout the 2019/20 
financial year. It follows last year’s report, published in February 20201, covering activity during 
2018/19. 
We have published the same volume of data as in previous years, via corresponding Excel tables 
(available here). This summary report presents key statistics from the 2019/20 financial 
year. It describes important trends shown in the accompanying excel tables and references the 
data throughout2.  
Also included in this report is our response to enforcement recommendations made by the Low 
Pay Commission (LPC) in their 2020 report. We accept 6 out of the 7 recommendations and 
partially accept the last, discussed in the final section of this report. 
The remainder of this report is structured as follows: 
•
Background (page 5)
o
The minimum wage rates (page 5)
•
Minimum wage enforcement in 2019/20 (page 6)
o
Enforcement of the minimum wage (page 6)
o
Promoting compliance (page 7)
o
Enforcement in 2019/20 (page 8)
o
Targeted and complaint led enforcement (page 9)
o
Penalties, undertakings, prosecutions, and the minimum wage Naming
Scheme (page 12)
•
Measuring non-compliance with the minimum wage (page 15)
o
Measuring minimum wage non-compliance in 2020 (page 16)
o
Analysis of workers with pay below the NLW/NMW (page 16)
•
Response to LPC 2020 enforcement recommendations (page 20)
•
References (page 23)
1 Department for Business, Energy, and Industrial Strategy (2020a) 
2 The 2019/20 financial year ended on the 31st March 2020, approximately one week after the introduction of the 
UK-wide ‘lockdown’ introduced due to the COVID-19 pandemic. As such, the figures from 2019/20 do not show 
the impact of the COVID-19 pandemic. The impact of COVID-19 on minimum wage enforcement will be discussed 
in greater depth in the equivalent 2020/21 report. 

National Minimum Wage: 2019/20 Enforcement Statistics 
5 
Background 
The minimum wage rates 
The National Minimum Wage (NMW) was introduced in 1999, with the National Living Wage 
(NLW) introduced in 2016. The NMW and NLW (together referred to as the minimum wage) 
provide essential protection for the lowest paid workers, ensuring they are fairly 
compensated for their contribution to the UK economy. 
The minimum wage sets a minimum hourly rate of pay that all employers are legally required to 
pay to their workers. Almost all UK workers are entitled to the minimum wage, although the rate 
of pay that they are entitled to is dependent on their age and whether they are an apprentice3. 
Table 1 below shows the minimum wage rates that were applicable across the 2019/20 financial 
year (the enforcement year covered in this summary report4).  
Table 1. Minimum wage rates (per hour) as of April 2019 and April 2020 
Age Band 
April 2019 
April 2020 
25 years old and over 
£8.21 
£8.72 
21 to 24 years old 
£7.70 
£8.20 
18 to 20 years old 
£6.15 
£6.45 
16 to 17 years old 
£4.35 
£4.55 
Apprentice 
£3.90 
£4.15 
Source: HM Government (2020b) 
3 See HM Government (2020a) for details of the workers entitled to the Minimum Wage, and exceptions to this. 
4 See HM Government (2020b) for details of the current (2020/21) Minimum Wage rates 

National Minimum Wage: 2019/20 Enforcement Statistics 
Minimum wage enforcement in 2019/20
Enforcement of the minimum wage 
Government is clear that anyone entitled to the minimum wage should receive it and is 
committed to pursuing employers who do not pay it (here referred to as non-compliance). 
Whilst the vast majority of employers pay their staff correctly, there is a small minority who fail 
to do so, either deliberately or through inadvertent non-compliance. 
Her Majesty’s Revenue and Customs (HMRC) enforce the minimum wage on behalf of the 
government.  HMRC proactively use a variety of methods to encourage compliance and alter 
employer behaviour, based around a ‘Promote, Prevent and Respond’ strategy.  
Promoting compliance is based upon the idea that most of non-compliance is due to a lack of 
information and/or incompetence, rather than deliberate behaviour from the employer. The main 
approach is to improve the information available to employers; on the assumption that 
employers will become compliant with the law once they better understand it. Employers who do 
not respond to compliance measures can then be identified and subjected to enforcement action. 
Deterrence is based on the principal that some employers actively make a rational decision 
whether to underpay, balancing the potential benefits of underpaying workers against the risk 
and consequences of being caught. The aim, therefore, of enforcement should be to alter 
employers’ behaviour by raising the risk of being caught, and by highlighting the consequences 
of being caught. 
When identifying a case, HMRC either respond to worker complaints made directly through their 
online complaint form or redirected ACAS calls, or target a specific employer based on various 
different risk factors. 
Once underpayment has been identified, HMRC pursue employers to ensure that any arrears 
are paid to workers as soon as possible. In some instances, employers are given the opportunity 
to “self-correct” their own arrears before HMRC pursues more stringent penalties if employers 
fail to take steps to ensure workers’ pay is compliant with the law. Sanctions to deter future non-
compliance include: 
•
Financial penalties
•
Public naming by BEIS on the gov.uk website
•
Issuing Labour Market Enforcement Undertakings (LMEUs)
•
Prosecution (in the most malicious, serious cases of non-compliance)
HMRC’s budget for enforcing the minimum wage has nearly doubled since the 
introduction of the NLW, increasing from £13.2 million in 2015/16, to £26.3 million in 
2019/20. This is to account for the increasing number of workers brought within scope of  

National Minimum Wage: 2019/20 Enforcement Statistics 
7 
increasing minimum wage rates, to promote more recent changes in minimum wage legislation 
and to further enhance compliance.  
Promoting compliance 
Both BEIS and HMRC carry out communications activity to promote the minimum wage and 
improve worker and employer awareness to encourage compliance. Promote activity aims to 
prevent non-compliance occurring in the first place by changing the behaviour of both employers 
and workers.  
HMRC’s minimum wage ‘Promote’ team carries out a variety of work to achieve this; working 
with employers to put them in a position to be compliant, and encouraging workers to check their 
pay in line with the minimum wage legislation and to make a complaint if necessary. 
In 2019/20, HMRC’s Promote team encouraged nearly 900,000 employers and workers to 
seek further information regarding the minimum wage. This is an increase from the previous 
year (264,135) and is mainly due to text message (SMS) related search activity (over 200,000) 
and mass email mail outs (over 500,000).  
HMRC provided a large amount of information to ensure the workers and employers are 
aware of legislation. In 2019/20, this resulted in: 
•
Nearly 30,000 views of the work experience and intern’s guidance and over 10,000
views of the technical manual;
•
Over 13,000 views of the Calculating the Minimum Wage guidance;
•
Over 6,600 views of pre-recorded minimum wage content (e.g. YouTube videos, e-
learning material and recorded presentations); and,
•
Over 3,500 views of live minimum wage material, (e.g. live webinars, face-to-face
presentations and online events).
This demonstrates the work the Promote team have done to inform workers of their rights and 
employers of their obligations, ensuring future compliance with legislation. The figures presented 
show that employers and workers are making use of the information and are actively seeking to 
educate themselves on specific aspects.  
BEIS launched a £1.1 million campaign in April 2019 to encourage workers to check their pay, 
educate them on the common ways they may be being underpaid and to explain what they can 
do if they believe they are underpaid. 

National Minimum Wage: 2019/20 Enforcement Statistics 
8
Enforcement in 2019/20 
The 2019/20 financial year was another strong year for minimum wage enforcement; 
HMRC opened over 3,500 cases in 2019/20, an increase of 27% from the previous year (2,800). 
More than 3,300 cases were closed, a rise of 12% since 2018/19, with nearly 1,300 closing with 
arrears. The proportion of closed investigations where employers are found to be non-compliant 
(also known as the “strike rate”) of 42% is consistent with preceding years. 
Figure 1 below shows that HMRC identified over £20.8 million in arrears for more than 
263,000 workers and issued just under 1,000 penalties totalling £18.5 million to non-
compliant employers5.  
This means that since the introduction of the NMW in 1999, the government has ordered 
employers to repay over £139 million to 1.1 million workers, issued over £59 million in 
financial penalties and completed over 81,000 investigations.  
Figure 1. Minimum wage investigations: arrears and workers identified 
Source: BEIS / HMRC enforcement data 
5 This includes arrears identified as part of the Social Care Compliance Scheme. This was a voluntary scheme 
that allowed employers to conduct a self-review to identify and pay any wage arrears to workers. Employers had 
up until March 2019 to identify and repay any arrears they owed their workers. For more information on the 
scheme, please see Chapter 7 of our equivalent 2018/19 report on minimum wage compliance and enforcement 
(Department for Business, Energy and Industrial Strategy, 2020a). 

National Minimum Wage: 2019/20 Enforcement Statistics 
9 
Notes: 
1. An additional 30 cases were originally closed in 2015/16 but the employer notified HMRC of additional arrears in
2016/17. The arrears in these cases are included in the arrears total for 2016/17. 
2.There are an additional 11 cases originally closed prior to 2018/19 which notified further arrears in 2018/19. These
cases are included in the arrears total for 2018/19 
3.There are an additional 8 cases originally closed prior to 2019/20 which notified further arrears in 2019/20. These
cases are included in the arrears total for 2019/20. 
Table 1 in the accompanying Excel data also shows that average arrears per case stood at 
nearly £6,200 in 2019/20, and that average arrears per worker stood at £79 – a continuation 
of the longer-term trend of declining average arrears per worker. This is in part due to the change 
in HMRC’s approach; taking account of non-compliance across an employer’s whole business, 
rather than just the specific worker who may have complained. Whilst this means employers can 
be fully compliant in the future and that more workers are reached, the arrears identified can 
vary significantly in value. 
Table 2 in the accompanying Excel data shows that in 2019/20, of the 1,268 cases closed with 
arrears, HMRC closed 33 cases which had over £100,000 in arrears each. Together, these 
cases reached a total of nearly £14.5 million in arrears6, and accounted for over 174,000 
workers. This remains consistent with the previous year, where HMRC closed 34 cases in 
excess of £100,000 in arrears, reaching a total of £17.4 million for almost 164,000 workers. 
Targeted and complaint led enforcement 
Non-compliance with the minimum wage is identified through two routes. In the first instance, a 
worker can raise a complaint via the Acas helpline or via HMRC’s online complaint form. This 
is referred to as “complaint-led” or reactive enforcement.  
As with last year, the majority of complaint led cases in 2019/20 were received via HMRC's 
online complaint form (2,552), as opposed to the Acas helpline (752) or 'other' sources (28). For 
more information, please see Table 8b in the accompanying Excel spreadsheet. 
HMRC respond to every single complaint made by a worker (either to HMRC or referred 
via Acas) and use a risk-based triage to determine the most appropriate course of action. 
There are a number of interventions that HMRC can use to pursue a complaint-led case. 
These are proportionate to the level of risk of non-compliance and are designed to ensure that 
workers understand their legal entitlements and receive any arrears owed. The interventions 
6 These figures include normally assessed (i.e. arrears assessed by HMRC) and self-corrected arrears, which
explains why there is a slight fall compared to last year. Only arrears that are normally assessed are subject to a 
penalty and included in the naming announcements. 

National Minimum Wage: 2019/20 Enforcement Statistics 
10 
that HMRC use include: ‘nudge’ letters, telephone contact with employers and workers and face-
to-face meetings with employers and workers7. 
Additionally, HMRC can themselves identify cases of non-compliance by proactively targeting 
sectors or employers where they believe non-compliance is prevalent. This is referred to as 
“targeted enforcement”. 
Targeted enforcement is informed by HMRC’s risk model, which uses data from a range of 
sources (including PAYE, Tax Credits information, information from other labour market 
enforcement bodies, NMW intelligence and complaints data and ministerial priorities) to identify 
workers most at risk of NMW underpayment. The risk model continues to yield encouraging 
results and accurately identify businesses with a high risk of underpayment. For information 
about the volume of targeted enforcement cases through these different sources, please see 
Table 7b in the accompanying Excel spreadsheet. 
As with complaint-led enforcement, there are a number of ways in which HMRC can pursue a 
targeted enforcement case. These include one-to-one meetings with employers, team-based 
reviews of businesses and multi-agency joint working (to tackle risks of cross-cutting illegal 
behaviours). 
The threat of being the subject of targeted enforcement provides a valuable deterrent to 
employers and supports workers who may not be aware that they are underpaid or who are 
unwilling to raise a complaint. Targeted enforcement is therefore an essential means to reach at 
risk workers, as they may not otherwise come forward to make a complaint. 
Targeted enforcement continues to form an important part of enforcement activity; HMRC 
opened over 2,500 targeted enforcement cases in 2019/20 – the largest number and the 
largest share of cases opened (70%, a 17% percentage increase from 2018/19) since 2014/15. 
Targeted enforcement made up a correspondingly large proportion of all cases closed in 2019/20 
(65%, an 10% percentage point increase from 2018/19). For more information, please see Table 
7a in the accompanying Excel spreadsheet. 
Together, this meant that the highest number of workers and arrears were identified as part 
of targeted enforcement in 2019/20. Figures 2 and 3 below show that 76% of arrears (£15.8 
million) and 81% (212,000) of the workers identified were found through targeted enforcement; 
and that this proportion has increased over the last six years.  
7 For more information about this activity, please see the 2018/19 report on minimum wage enforcement and 
compliance (Department for Business, Energy and Industrial Strategy, 2020a). 

National Minimum Wage: 2019/20 Enforcement Statistics 
11 
Figure 2. Arrears identified through targeted and complaint-driven enforcement 
Source: BEIS / HMRC enforcement data 

National Minimum Wage: 2019/20 Enforcement Statistics 
12 
Figure 3. Workers identified as underpaid through targeted and complaint-driven 
enforcement 
Source: BEIS / HMRC enforcement data 
Tables 7a and 8a in the accompanying Excel data show that the strike rate for targeted 
enforcement cases is lower than in complaint led cases (38%, as opposed to 49%), although 
this gap has slightly narrowed since 2018/19 last year (37% for targeted cases, 55% for 
complaint-led cases). Complaint-led cases are more likely to have a higher strike rate because 
HMRC’s investigation is based upon a direct source of intelligence (i.e. a worker’s complaint), 
as opposed to predicting non-compliance to target employers. Despite this, the strike rate for 
targeted enforcement remains relatively high, and reflects HMRC’s ability to successfully 
identify employers, especially given the increasing volume of targeted enforcement 
cases. 
Penalties, undertakings, prosecutions, and the minimum wage 
Naming Scheme 
HMRC continues to respond strongly in cases where workers have been underpaid the 
minimum wage. HMRC use a mix of civil penalties, enforcement undertakings, criminal 
prosecutions and the BEIS minimum wage Naming Scheme to deter other employers from 
underpaying their workers.  

National Minimum Wage: 2019/20 Enforcement Statistics 
13 
Civil penalties and Labour Market Enforcement Undertakings 
One of the Government’s aims is to ensure that, as a result of enforcement action, workers 
receive the money they are owed as quickly as possible. In the vast majority of cases HMRC 
pursues the civil enforcement route, which is the quickest way of ensuring workers receive their 
arrears. The civil route includes HMRC conducting an investigation, identifying if workers have 
been underpaid and then taking enforcement action via the civil courts if payment is not made.  
Nearly 1,000 (992) penalties were issued to non-compliant employers in 2019/20, a similar 
amount to last year (1,008). The total value of the penalties issued increased by 8% relative to 
2018/19; from £17.2 million to nearly £18.5 million in 2019/20. 
As well as issuing penalties, HMRC can also issue Labour Market Enforcement 
Undertakings (LMEUs). LMEUs were introduced in 2016, and specifically target non-compliant 
businesses who persistently breach minimum wage legislation and secures future compliance 
to protect workers from continuing abuse. When issued with an LMEU, businesses are required 
to enter into an ‘undertaking’ to take steps to prevent further offenses. If a business refuses or 
fails to comply, then a magistrates’ court (or similar in devolved administrations) has the power 
to impose an Order which requires the business to take action to avoid further offenses. The 
amount of LMEUs issued by HMRC has increased, rising to 21 in 2019/20. 
Criminal prosecutions 
Only the most serious non-compliant cases are referred for criminal investigation and 
prosecution. Our intention is to cooperate with employers and workers to help them 
understand minimum wage legislation and to deter employers from underpaying workers. 
Criminal prosecutions are significantly more costly than civil cases and do not guarantee 
that arrears are repaid to workers; further enforcement may be required to ensure this 
happens. HMRC considers all the evidence and whether it is in the public interest to prosecute. 
HMRC’s Serious Non-Compliance teams undertake a programme of employer-specific 
investigations and multi-agency operations to identify potential criminal behaviours to refer for 
criminal investigation by HMRC’s Fraud Investigation Service. HMRC will then refer cases to the 
Crown Prosecution Service who ultimately decide whether to prosecute. 
Since 2007, fifteen employers have been successfully prosecuted for underpaying the 
minimum wage, with the most recent prosecution in November 2019. For more information 
about these prosecutions, please see Table 12 in the accompanying Excel data.  
Naming Scheme 
The minimum wage Naming Scheme remains a key part of the civil sanctions used to deter 
employers from breaking minimum wage law. The Naming Scheme highlights non-compliant 
employers by exposing their breaches publicly, promoting their future compliance and 
deterring other businesses from underpaying the minimum wage. 

National Minimum Wage: 2019/20 Enforcement Statistics 
14 
Following a review, we announced in February 2020 that the Naming Scheme would continue 
under revised criteria8. The latest naming round (Round 16) has now been published, 
alongside a new educational bulletin which highlights and explains common reasons for 
minimum wage underpayment. In Round 16, 139 employers were named for £6.7 million in 
minimum wage arrears owed to 95,000 workers – the largest amount of arrears ever identified 
in a naming round. Together, this means that over 2,000 employers have now been named since 
the introduction of the scheme in 2013. 
For more information, please see: https://www.gov.uk/government/news/rogue-employers-
named-and-shamed-for-failing-to-pay-minimum-wage  
8 For more information, please see Department for Business, Energy and Industrial Strategy (2020b) 

National Minimum Wage: 2019/20 Enforcement Statistics 
15 
Measuring non-compliance with the 
minimum wage 
We use a number of information sources to assess the scale and nature of minimum wage non-
compliance, which in turn informs our enforcement approach.  
Estimates of non-compliance can be made using the Office for National Statistics’ (ONS) 
Annual Survey of Hours and Earnings (ASHE); a survey of employees completed by 
employers. ASHE provides information about the levels, distribution and make-up of earnings 
and hours paid for employees.9 Using ASHE, we can estimate the number of jobs paid below 
the minimum wage at a particular point in time. These estimates can be broken down by sex, 
age, region, sector, and full-time and part-time working. 
However, a number of methodological issues (including the proximity of the survey to the 
annual minimum wage uprating; the fact that the survey only measures underpayment in the 
formal economy; and there being legitimate reasons for underpayment) mean that ASHE does 
not offer a direct measure of minimum wage non-compliance. 
The 2020 ASHE survey was affected by the COVID-19 pandemic and UK-wide ‘lockdown’, 
which started on the 23rd March 2020. Restrictions lasted for the duration of fieldwork, and meant 
that the survey was affected in the following ways: 
1.
Non-essential businesses were not open during fieldwork, meaning that employers could
not complete the paper questionnaires sent to their premises. This meant a smaller
number of employers completed the survey than in previous years.
2.
The type of employers who completed the survey also changed, as certain types of
employer (e.g. those in the retail and hospitality sector) were more likely to be affected
by lockdown restrictions. This meant that additional weighting was required to adjust the
profile of the survey.
3.
Workers were furloughed, meaning that many workers earnt less than they normally
would during the survey period (i.e. 80% of their normal earnings). The rules for
calculating furlough pay for the Coronavirus Job Retention Scheme (CJRS) also meant
that the 2020 minimum wage uprating may not have applied to the calculation of furlough
payments. This is because furlough payments received via the CJRS corresponded to
hours not worked; hours worked were still subject to minimum wage requirements10.
9 Office for National Statistics (2019)  
10 This is because furloughed workers’ minimum wage entitlement depends on when they ‘started’ furlough. If a 
worker started furlough prior to 1st April 2020, they were entitled to the 2019 rates throughout the period they were 
on furlough. If a worker started furlough from the 1st April onwards, the 2020 rates applied. It is not possible to 
determine which year’s minimum wage rates apply to each worker, because the date they started furlough is not 
available in the ASHE data. 

National Minimum Wage: 2019/20 Enforcement Statistics 
16 
It was not possible to amend the ASHE questionnaire to account for furlough, meaning 
that erratic pay information was recorded. It is difficult to establish with certainty that any 
minimum wage underpayment is ‘genuine’ underpayment. It could equally be a result of 
the conditions attached to furlough11, or because of employers provided erroneous 
information due to uncertainty over how to account for furlough in their response. 
Aided by conversations with BEIS and the LPC, the ONS took steps to mitigate the impact of the 
COVID-19 pandemic. This included: including additional guidance separate to the questionnaire, 
to better help employers complete the survey for furloughed workers; extending fieldwork to 
allow for a greater number of employers to respond to the survey; creating new survey weighting 
so that the employers who responded better reflected the UK employer population as a whole; 
working with HMRC to append markers for furloughed workers; and conducting extra data 
validation to correct pay information. Despite this, there are signs that the data (and 
particularly estimates of underpayment) have changed relative to previous years. 
Measuring minimum wage non-compliance in 2020 
The issues outlined above mean that (unlike in previous years) there are various ways in which 
underpayment estimates may be calculated, based on including or excluding furloughed 
workers; and including or excluding those who saw a “loss in their pay” due to furlough. 
Furloughed workers are predominantly receiving pay for hours not worked, which is not subject 
to NMW legislation. This means that most instances where furloughed workers receive an 
amount below the minimum wage, is unlikely to be ‘true’ minimum wage non-compliance. It is 
instead likely to be associated with the conditions attached to furlough. However, we 
acknowledge that furloughed workers are more likely to be lower-paid, and that some furloughed 
workers in ASHE may already have been receiving less than the minimum wage in their job prior 
to being furloughed (i.e. would be part of the 408,000 underpaid workers identified in 2019, see 
Figure 4 below). 
Analysis of workers with pay below the NLW/NMW 
Estimates from the ONS found that an estimated 2,041,000 workers earnt below the 
minimum wage in April 2020. However, as they acknowledged, the majority of these 
workers were furloughed, and this is therefore not representative of minimum wage non-
compliance. These workers would not have worked any hours in the reference period, therefore 
minimum wage legislation would not be applicable to these pay estimates.  
As noted by the Low Pay Commission in their 2020 report, estimates including furloughed 
workers are an overestimate of underpayment, as many of the furloughed workers would not 
ordinarily be paid below the minimum wage.  
11 ASHE uses a paper questionnaire, printed months in advance of the survey starting. The questionnaires for 
ASHE 2020 were printed prior to the start of the UK lockdown, and there was not enough time to re-print them to 
account for furlough without significantly delaying the start of the survey. 

National Minimum Wage: 2019/20 Enforcement Statistics 
17 
Once furloughed workers are removed, we estimate that approximately 347,000 workers 
were paid below the relevant minimum wage in April 2020, as shown in Table 12 and 
Figure 4 below.  
We recognise that this may be an underestimate, as it excludes some low-paid workers who 
would otherwise be underpaid (i.e. as discussed above, some furloughed workers were likely 
paid below the minimum wage before being furloughed). It is likely that the true figure for 
underpayment is marginally higher than this estimate. However, this is unobservable in the data. 
In the absence of being able to accurately estimate minimum non-compliance, we 
undertake our analysis on pay estimates of workers not furloughed.  
Tables 15-19 and Figures 16-19 in the accompanying excel data provide further information on 
underpayment across different subgroups of worker. 
Figure 4. Minimum wage underpayment over time (2016-2020) 
Source: BEIS analysis of ASHE 2016-2020 (ONS) 
Notes: 
Figures are rounded to the nearest thousand. 
This shows underpayment across all minimum wage rates 

National Minimum Wage: 2019/20 Enforcement Statistics 
18 
Table 2. Estimates of minimum wage non-compliance in 2019 and 2020 
Minimum wage rate 
April 2019 
April 2020 
25 years old and over (NLW) 
345,000 
297,000 
21 to 24 years old (NMW) 
32,000 
25,000 
18 to 20 years old 
(Development) 
9,000 
18,000 
16 to 17 years old (Youth) 
3,000 
3,000 
Apprentice 
9,000 
5,000 
Total 
408,000 
347,000 
Source: BEIS analysis of ASHE 2020 (ONS) 
Notes:  
Figures are rounded to the nearest thousand. 
Underpayment figures for each of the minimum wage rates do not sum to the totals presented because of 
rounding. 
Due to the issues with the 2020 data, we cannot be certain how the outlook for 
underpayment has changed compared to last year. Once furloughed workers are removed, 
the distribution of National Living Wage underpayment follows a similar trend to previous years. 
Figure 5 – a wage distribution chart- examines this in more detail, by looking at how many people 
were earning different percentages of the minimum wage. In both 2019 and 2020, there has 
been a clear spike in underpayment at the previous year’s NLW rate. This demonstrates that 
some underpayment may have arisen from an employer’s failure to uprate their employees pay 
in line with the annual uprating. For example, the 2020 line shows a peak at around 94% of the 
2020 rate, roughly equivalent to the old 2019 NLW (£8.21). Likewise, the 2019 line has a peak 
at a point close to the previous year’s NLW rate. The analysis in this chart complements Figure 
19 in the accompanying Excel spreadsheet. 

National Minimum Wage: 2019/20 Enforcement Statistics 
19 
Figure 5. Distribution of National Living Wage underpayment in April 2019 and April 2020 
Source: BEIS analysis of ASHE 2020 (ONS) 

National Minimum Wage: 2019/20 Enforcement Statistics 
20 
Responding to the Low Pay Commission’s 
enforcement recommendations 
In their non-compliance and enforcement of the National Minimum Wage report in May 2020, 
the Low Pay Commission made seven recommendations to Government. We are pleased to 
accept all of these, as detailed below.  
Recommendation 
Response 
1 
We recommend the Government evaluates what data are 
recorded in non-compliance investigations, and considers 
how this can be used to develop measures of cost-
effectiveness. 
Accept 
2 
We recommend the Government monitors the effects of 
the increase in the threshold for naming employers found 
to have underpaid workers. 
Accept 
3 
We urge the Government to take responsibility for the 
delivery of the new higher NLW target in the sectors 
where it is the main source of funding. 
Accept 
4 
We recommend the Government uses targeted 
communications to both apprentices and their employers 
to highlight underpayment risks, and in particular the 
problem of non-payment of training hours. 
Accept 
5 
We recommend HMRC review the way they record 
apprentice underpayment, and to publish the numbers 
and profile of the apprentices they identify as underpaid. 
Partially accept 
6 
We recommend that HMRC review their approach to 
investigations involving apprentices, to understand 
whether these investigations would identify non-payment 
of training hours. 
Accept 
7 
We join the Director of Labour Market Enforcement in 
recommending that the Government reviews the 
regulations on records to be kept by an employer, to set 
out the minimum requirements needed to keep sufficient 
records. 
Accept 

National Minimum Wage: 2019/20 Enforcement Statistics 
21 
Recommendation: We recommend the Government evaluates what data are recorded in 
non-compliance investigations, and considers how this can be used to develop measures 
of cost-effectiveness. 
Government accepts this recommendation and agrees this is necessary. 
Recommendation: We recommend the Government monitors the effects of the increase 
in the threshold for naming employers found to have underpaid workers. 
Government accepts this recommendation. Having restarted Naming in 2020 following a 
period of review, we will monitor the process over the next few rounds of Naming to understand 
the effect of the increase in the threshold for naming.  
Recommendation: We urge the Government to take responsibility for the delivery of the 
new higher NLW target in the sectors where it is the main source of funding. 
Government accepts this recommendation in full and aims to improve information sharing 
within government between minimum wage and sectors such as social care and childcare.  The 
government will continue to consider the impacts of NLW targets as part of future spending 
reviews and ensure that it continues to gain collective agreement across government of future 
NLW and NMW rates. It will continue to publish an Impact Assessment alongside the legislation 
identifying affected sectors. 
Recommendation: We recommend the Government uses targeted communications to 
both apprentices and their employers to highlight underpayment risks, and in particular 
the problem of non-payment of training hours. 
We accept this recommendation in full and will use upcoming communications activity to 
apprentices and their employers to highlight underpayment risks. 
Recommendation: We recommend HMRC review the way they record apprentice 
underpayment, and to publish the numbers and profile of the apprentices they identify as 
underpaid. 
We partially accept this recommendation. We have undertaken a review into the way in which 
apprentice underpayment is recorded. This found that the current HMRC case management 
system does not allow us to readily record information down to this granular level. Most NMW 
cases are multi factorial and may have more than one risk identified: any underpayments 
identified are not apportioned down or recorded to the individual risks. For example, seven 
workers may be underpaid by an employer but only one be an apprentice. On the current case 
management system this would show the arrears identified as non-payment of NMW. 
Conversely, an apprentice may not be paid for training time, but the hourly rate of pay is sufficient 
for there to be no underpayment overall (although the employer would be educated). 
Consequently, such amendments to the systems would not currently be proportionate.  

National Minimum Wage: 2019/20 Enforcement Statistics 
22 
In the longer term the move to a Single Enforcement Body will create an opportunity for 
wholesale review of our systems, which may allow us to do this in the future subject to cost. This 
wholesale review will enable us to identify how feasible publishing further numbers regarding 
apprenticeship underpayment. 
Recommendation: We recommend that HMRC review their approach to investigations 
involving apprentices, to understand whether these investigations would identify non-
payment of training hours. 
We accept this recommendation in full. HMRC NMW teams already consider whether there 
is an apprentice risk in every case. This includes speaking to the employer and apprentice about 
training hours to understand whether it is an issue. 
Recommendation: We join the Director of Labour Market Enforcement in recommending 
that the Government reviews the regulations on records to be kept by an employer, to set 
out the minimum requirements needed to keep sufficient records. 
Government accepts this recommendation. We already plan to extend the time employers 
are required to keep such records from 3 to 6 years, and will review the regulations on records 
required to be kept by employers to assess whether they are detailed enough. We will also 
consider alternatives to amending the regulations, such as reviewing our guidance to employers 
on what records they should keep for the purposes of minimum wage enforcement. 

National Minimum Wage: 2019/20 Enforcement Statistics 
23 
References 
Department for Business, Energy and Industrial Strategy (2020a). National Living Wage and 
National Minimum Wage: Government evidence on compliance and enforcement 2018/19 
[online]. Available at: https://www.gov.uk/government/publications/national-living-wage-and-
national-minimum-wage-government-evidence-on-compliance-and-enforcement-2019. 
Department for Business, Energy and Industrial Strategy (2020b). Naming employers who fail 
to pay minimum wage to be resumed under revamped rules [online]. Available at: 
https://www.gov.uk/government/news/naming-employers-who-fail-to-pay-minimum-wage-to-be-
resumed-under-revamped-
rules#:~:text=The%20naming%20scheme%20will%20resume,the%20measure%20as%20a%2
0deterrent.  
Department for Business, Energy and Industrial Strategy (2020c). Rogue Employers Named 
And Shamed For Failing To Pay Minimum Wage [online] Available at: 
https://www.gov.uk/government/news/rogue-employers-named-and-shamed-for-failing-to-pay-
minimum-wage  
HM Government (2020a). The National Minimum Wage and Living Wage: Who gets the 
Minimum Wage [online]. Available at: https://www.gov.uk/national-minimum-wage/who-gets-
the-minimum-wage. 
HM Government (2020b). National Minimum Wage and National Living Wage Rates [online]. 
Available at: https://www.gov.uk/national-minimum-wage-rates. 
Low Pay Commission (2019). Non-compliance and enforcement of the National Minimum 
Wage – April 2019 [online]. Available at: https://www.gov.uk/government/publications/non-
compliance-and-enforcement-of-the-national-minimum-wage-april-2019. 
Low Pay Commission (2020). Non-compliance and enforcement of the National Minimum 
Wage 2020 [online]. Available at: https://www.gov.uk/government/publications/non-
compliance-and-enforcement-of-the-national-minimum-wage.  
Office for National Statistics (2019). ‘Employee earnings in the UK: 2019’ [online]. Available at: 
www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletin
s/annualsurveyofhoursandearnings/2019.  
Office for National Statistics (2020). ‘Employee earnings in the UK: 2020’ [online]. Available at: 
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/
bulletins/annualsurveyofhoursandearnings/2020.  

National Minimum Wage: 2019/20 Enforcement Statistics 
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This publication is available from: https://www.gov.uk/government/publications/national-living-
wage-and-national-minimum-wage-government-evidence-on-compliance-and-enforcement-
201920 
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