The naming list published overnight will get read as a story about big brands, and that is the least useful way to read it. Look at the explanations the named employers gave and there is not a single one that amounts to a decision to underpay anybody. B&Q said its shortfalls came from calculations involving geographical allowances. Five Guys said “technical differences in how payroll regulations were applied”. Two NHS trusts were caught by salary sacrifice schemes and London weighting. A third was caught because meetings, handovers and time spent changing into uniform had not been counted as working time. Every one of those is a payroll configuration, not a payroll policy.
That is why this matters to a fourteen-person business and not just to a DIY chain. The mechanisms that caught B&Q are sitting in most small payrolls somewhere, and the threshold for appearing on a list like this one is not measured in millions. The Fair Work Agency’s own enforcement policy statement says the Department for Business and Trade considers a case for naming where the total arrears owed to workers was £500 or more. Five hundred pounds. That is the bar for being published on the same list as B&Q.
What the list actually says
The BBC reports 658 businesses named, more than 600 employers ordered to repay outstanding wages, £4m returned to workers and penalties worth £7m. The list covers shops, restaurants, nurseries, social care providers and a handful of NHS trusts. B&Q underpaid 4,530 workers a total of £456,934.72. Five Guys owed £54,642.47 to 3,699 staff. Elysium Healthcare Holdings 3 owed £330,048.81 to 1,095 workers, and Forest Holidays £100,308.68 to 598.
This is the first naming round since the Fair Work Agency was set up in April under the Employment Rights Act, and the agency is not staying in its lane for long — it will also take on holiday pay and sick pay enforcement. Kate Dearden, minister for the future of work, put the instruction plainly: every employer should check their payroll now.
The per-head numbers are tiny. The penalty is not.
Divide the Five Guys figure by the number of staff involved and the scale of the individual error becomes clear. It is not a scandal-sized number per person. It is a rounding error per person, repeated 3,699 times.
| B&Q | Five Guys | |
|---|---|---|
| Total arrears | £456,934.72 | £54,642.47 |
| Workers affected | 4,530 | 3,699 |
| Average per worker | £100.87 | £14.77 |
| That, in hours at £12.71 | 7.9 hours | 70 minutes |
| Penalty at 200% of arrears | £913,869 | £109,285 |
Seventy minutes of pay per person, across a payroll, produced a six-figure penalty and a place on a government list. The statutory rate is set out in the enforcement policy statement: 200% of the total underpayment for all workers on the notice, a minimum of £100, a maximum of £20,000 per worker, and a reduction of half where all of the unpaid wages and half of the penalty are paid within 14 days. Set the £7m of penalties against the £4m of arrears and you can see the prompt-payment discount doing its work across the cohort.
Worked through on a fourteen-person business
An illustration built from the published rates rather than a client file. A residential care business with fourteen staff on the 21-and-over rate of £12.71. Shifts change over at 8pm, and the outgoing and incoming staff spend ten minutes on handover before the clock officially starts. Nobody has decided not to pay for it. It has simply never been on the rota.
HMRC’s own checklist of common causes of underpayment lists exactly this: failure to pay for additional time added to a shift, for example team handovers between shifts or time spent passing through security checks. Five shifts a week, forty-six working weeks, ten minutes each.
| Per person | All 14 staff | |
|---|---|---|
| Unpaid minutes a year | 2,300 | 32,200 |
| Unpaid hours a year | 38.3 | 536.7 |
| Arrears at £12.71 | £487.22 | £6,821 |
| Penalty at 200% | — | £13,642 |
| Cash out if paid within 14 days | — | £13,642 |
Ten minutes a shift costs that business £13,642 in arrears and penalty even on the best available terms, and takes it well past the £500 naming threshold. Pay late and the penalty is the full £13,642 on top of the £6,821, so £20,463. Every pound of it is avoidable by moving the shift start ten minutes earlier on the rota.
The £24 polo shirt
The second mechanism is deductions, and this one catches hospitality and retail hardest. Charge a new starter £24 for a branded polo shirt out of their first pay packet and you have reduced their pay for minimum wage purposes. Somebody aged 21 on exactly £12.71 doing 30 hours a week is paid for 130 hours in a monthly pay period, which is £1,652.30. Take £24 off and it is £1,628.30, or £12.53 an hour. That month is an underpayment.
Do it to 25 new starters and the arrears are £600 — over the naming threshold, with a £1,200 penalty on top. And the relief that exists elsewhere does not reach it. The Secretary of State’s directions remove the penalty and the naming where an employer operated a deduction, salary sacrifice or savings scheme within the permitted categories, with the worker’s consent, and the worker received the benefit. Those directions say expressly that this does not apply to deductions for items connected with employment, such as a uniform, nor to expenses, nor to accommodation. Nor is it available at all to an employer issued with a notice of underpayment in the previous six years.
Old mistakes are repriced at today’s rates
This is the part almost nobody knows, and it is the reason a small historic problem does not stay small. Arrears are not repaid at the rate that applied when the underpayment happened. The enforcement policy statement sets out the calculation: the underpayment is divided by the minimum wage rate in force at the time and multiplied by the rate currently in force, using the band that applied to the worker when the arrears accrued.
One of the trusts on the list underpaid apprentices between 2019 and 2023. Take an apprentice underpaid £300 in the year to March 2020, when the apprentice rate was £3.90. That is 76.9 hours of unpaid work. At today’s apprentice rate of £8 those same hours are worth £615.38. The debt more than doubled while the employer did nothing at all, and the penalty is calculated on the uprated figure.
Five checks worth doing this week
Rebuild the rota around actual start and finish times. Handovers, security checks, till cash-ups, opening and closing routines, time spent required to be on the premises and available even when there is no work to do. If it happens and it is not on the timesheet, it is arrears.
List every deduction and every payment taken from staff. Uniform, tools, DBS checks, till shortages, parking, training bonds. Anything connected with the job comes off minimum wage pay and carries no penalty relief.
Run the salary sacrifice check on your lowest-paid people. Cash pay after the sacrifice is what counts, not before it. Our salary sacrifice calculator and take-home pay calculator will show you the post-sacrifice hourly figure in about a minute.
Diary the birthdays and the apprenticeship anniversaries. An apprentice aged 19 or over moves onto the rate for their age the day they complete the first year. Workers move up at 18 and at 21. The April uprating is the other date, and failing to apply it is on HMRC’s checklist too. Our cost of a hire calculator prices what each of those steps does to the real cost of a role.
Call Acas before you call anyone else if you find something. The free helpline is 0300 123 1100, Monday to Friday, 8am to 6pm, and complex queries get transferred to HMRC’s National Minimum Wage team. Acas is named in the government’s own guidance as the first port of call.
What is still open, and when we will know
Three things are unresolved. The government did not say what period the underpayments on this list covered, so there is no way to tell from the published figures whether these were single-year errors or long-running ones. The Fair Work Agency has said it will extend enforcement to holiday pay and sick pay but has not published a start date for either, and those two carry the same process-error risk as the minimum wage does. And the next rate change lands on 1 April 2027, which is the point at which every payroll in the country gets a fresh opportunity to make the simplest mistake on the list.
None of that changes what to do now. Fixing a handover on a rota costs nothing today and £13,642 in eighteen months. If you employ people at or near the minimum wage and want the rota, the deductions and the sacrifice arrangements checked against the rates rather than assumed to be fine, that is what our payroll and pensions work covers, and it sits alongside the wider small business accounting we do. Employers in Northern Ireland should also read what is different about employing people here, and hospitality and food businesses carry more of these mechanisms than anyone.