George Cokkinos, Solicitor in our Employment Law team, explains why organisations must ensure they understand their obligations to avoid penalties and long-term reputational damage.
For additional peace of mind, our Employment Team offers a free employment contract review, to help ensure your documentation remains fully compliant and fit for purpose. Details below.
The Minimum Wage increase
From 1 April 2026, millions of minimum-wage workers will receive an increase to their statutory rates. The updated National Minimum Wage rates will be:
- Age 21 and over:
£12.71 per hour (up from £12.21) –equivalent to an annual salary of £24,784.50 for a full-time employee. - Ages 18–20:
£10.85 per hour (up from £10.00) – the largest uplift of any age band. - Ages 16–17:
£8.00 per hour (up from £7.55).
These changes will have immediate cost implications for businesses and should be factored into budget planning, payroll systems, and wider workforce strategy.
Risks of underpaying the National Minimum Wage
Employers are legally required to pay workers at least the statutory minimum, and this obligation cannot be waived, even with employee agreement. Minimum wage compliance is tightly monitored and rigorously enforced.
Contrary to popular belief, it is not only small or under-resourced organisations that fall foul of the rules. Large and well-known employers such as Bupa, Hays Travel, Costa and Hovis have been named for minimum wage breaches this year.
Businesses found to be underpaying staff can face:
- Civil penalties of up to 200% of the underpayment (capped at £20,000 per worker)
- Full repayment of arrears to affected employees
- Public naming and shaming, resulting in reputational damage
- Challenges in future recruitment and retention, as enforcement action erodes trust
Even small administrative oversights such as deductions for uniforms, unpaid training time, or incorrect rates for birthdays or anniversaries can place employers at risk.
How our Employment Team can help
Our Employment Team advises businesses of all sizes on the full spectrum of employment law matters, including:
- Proactive support such as contract and policy drafting, workforce training, and guidance on avoiding disputes
- Reactive assistance, including disciplinary processes, internal grievances, and representation in Employment Tribunal proceedings
We also offer a free “traffic light” review of your organisation’s employment contracts. This involves:
- A review by an experienced solicitor
- A clear report within 1–2 weeks
- Identification of clauses that may be non-compliant or outdated
- Recommended updates to ensure your documentation is legally robust and aligned with modern working practices
If you’d like your contracts reviewed or need advice on preparing for the minimum wage increase, contact our Employment Law team on 03456 465465 or email enquiries@rotherabray.co.uk
Disclaimer: This blog is for information only and does not constitute legal advice. If you need legal advice, please contact us on 03456 465 465 or email enquiries@rotherabray.co.uk to get tailored advice specific to your circumstances from our qualified lawyers.
