389 Employers Named for Illegal Wages — Including Costa and Bupa. The New Enforcement Body Launches in 7 Days.

If Costa and Bupa were caught, no employer is immune. On 19 March 2026, the Department for Business and Trade published its latest National Minimum Wage enforcement round — 389 employers publicly named and shamed for underpaying 60,000 workers a combined £7.3 million. The Fair Work Agency takes over enforcement on 7 April, with the power to walk into your premises without warning. Here's exactly what went wrong for those 389 employers — and how to make sure you're not next.

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The Names That Made the News — and the Numbers Behind Them

The March 2026 naming round covers underpayment identified across a range of enforcement investigations. The employers named include household names:

• Costa Coffee — named for systematic underpayment, one of the most high-profile inclusions
• Bupa Care Services — a major UK care provider, reinforcing that no sector is immune
• Hays Travel — the UK's largest independent travel agent
• Busy Bees Nurseries — a national childcare chain
• ISS Mediclean — healthcare cleaning and facilities, named for £1.5 million in arrears affecting 6,580 workers
• Amey — public services infrastructure company

The total: £7.3 million in underpaid wages. The penalty for each employer: 200% of the underpayment amount, capped at £20,000 per worker — bringing total fines to approximately £12.6 million across the round.

What that means in practice: if you underpaid a worker by £500, you pay £500 back to them and £1,000 to the government. If you underpaid 10 workers by £500 each, that's £15,000 in government penalties alone — on top of the £5,000 you owe directly to your workers.

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Why Employers Keep Getting This Wrong

The government's enforcement data consistently shows the same categories of error. The March 2026 round is no exception. The most common causes of NMW violations:

1. Deductions from Wages

Deductions that bring a worker's effective hourly rate below the National Minimum Wage are illegal — regardless of whether the worker consented. Common examples that trip up employers:

• Uniform deductions — charging staff for uniforms that bring their effective pay below NMW
• Equipment costs — tools, safety gear, or specialist equipment deducted from pay
• Penalty deductions — clocking-in fines, breakage charges, or other workplace penalties

This is one of the most common errors in hospitality and retail, where uniform and equipment requirements are standard. Even a small weekly deduction can push a low-paid worker below the minimum.

2. Salary Sacrifice Schemes

Salary sacrifice has become far more common — for cycle-to-work, car leases, childcare vouchers, and pension contributions. The rule is simple but frequently ignored: salary sacrifice arrangements cannot reduce a worker's effective pay below the National Minimum Wage.

If your workforce is on or near the minimum wage and you operate any salary sacrifice scheme, every pay period needs checking. This became a bigger issue as NMW rates rose faster than salary sacrifice scheme values were adjusted.

3. Unpaid Pre- and Post-Shift Work

Every minute a worker is required to be at work — briefings before their shift starts, cashing up after their shift ends, cleaning tasks before they clock out — counts as working time for NMW purposes. You cannot pay a flat shift rate that excludes required pre- or post-shift activity.

This is endemic in hospitality, retail, and care. A 15-minute pre-shift briefing attended by 20 staff, five days a week, across 10 sites, adds up to over 86 hours of unpaid work per week. At £12.21 per hour (the previous rate), that's a potential £1,050 per week in underpayment — and the investigation clock starts from when HMRC or the FWA receives the complaint.

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The Fair Work Agency: What Changes on April 7

The Fair Work Agency officially launches on 7 April 2026. It inherits every active NMW investigation currently being run by HMRC — and it brings significantly expanded powers.

What stays the same:

• The 200% penalty structure (capped at £20,000 per worker)
• The public naming and shaming register
• The obligation to repay underpaid workers in full

What changes:

• Walk-in inspection rights — FWA inspectors can enter your premises without prior notice or a complaint
• Broader enforcement mandate — the FWA also enforces Statutory Sick Pay and holiday pay, which HMRC's NMW team could not
• Increased resource — the FWA has a dedicated inspectorate, not just HMRC's NMW compliance team
• Sector focus — hospitality has been named as the FWA's primary enforcement target for Year One

Under HMRC, NMW enforcement was largely complaint-driven. The FWA can initiate proactive sector-wide enforcement operations. If they decide to run a sweep of hospitality businesses in a given region, every employer in scope is a potential target — regardless of whether any worker has complained.

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The NMW Compliance Checklist: What to Check Before April 7

Every employer — regardless of sector or size — should run through this before the FWA launches.

Payroll Rate Check

• All workers aged 21+ are paid at least £12.71/hour (from 1 April 2026)
• Workers aged 18–20 are paid at least £10.85/hour (from 1 April 2026)
• Workers under 18 are paid at least £7.55/hour
• Apprentices in their first year, or aged under 19, are paid at least £7.55/hour
• Payroll software is updated to reflect the new rates (April 1 change)

Deductions Audit

• No deduction brings any worker's effective hourly rate below NMW
• Uniform and equipment costs have been reviewed
• Any salary sacrifice arrangements have been tested against the new £12.71/hour floor

Working Time Audit

• Pre-shift briefings and set-up time are either paid or ended before clocking in
• Post-shift tasks (cashing up, cleaning, closing checks) are paid or completed before the shift ends
• Unpaid trial shifts — if your business uses them — have been reviewed and discontinued

Record Keeping

• NMW records are retained for a minimum of 6 years
• A payroll system is in place that can produce records by worker, week, and pay period (the FWA can request these during an inspection)

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If You Find an Error: Act First

If your payroll audit turns up a historic underpayment — even a small one — the right move is to identify and correct it before the FWA does. Employers who self-identify and correct errors are treated differently from those caught in enforcement action.

HMRC's longstanding guidance applies here: voluntary disclosure, coupled with repayment and an explanation of how the error occurred and what has changed to prevent it recurring, is the strongest mitigating factor available. The FWA has confirmed it will adopt the same approach.

This is not the same as a penalty amnesty — you will still owe the underpaid wages to affected workers. But the 200% penalty is levied at the discretion of enforcement, and demonstrating good faith before contact begins carries real weight.

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Why the Named Employers Matter for Every Business

The scale of the March 2026 enforcement round sends a clear signal: there is no size threshold below which NMW enforcement is unlikely. Costa and Bupa have large compliance teams. They still made payroll errors at scale — because NMW non-compliance is most often a systemic process failure, not a deliberate choice.

For small businesses without dedicated HR or payroll functions, the risk is, if anything, higher. A sole trader who handles payroll in a spreadsheet, a restaurant owner who manages rotas manually, a care home manager who relies on agency shift cover — these are exactly the businesses least likely to catch a deduction error before it compounds.

The FWA knows this. Hospitality and care are primary targets precisely because the workforce is large, low-paid, and often on variable or casual contracts where NMW errors accumulate silently.

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The April 6 Layer: SSP and Holiday Pay

The Fair Work Agency does not only enforce NMW. From 7 April, it enforces three employment rights simultaneously:

1. National Minimum Wage — including all rate changes from April 1
2. Statutory Sick Pay — from April 6, SSP is payable from Day 1 of absence (the 3-day waiting period is abolished). The FWA enforces SSP entitlement directly.
3. Holiday pay records — from April 6, failing to keep adequate holiday pay records is a criminal offence. The FWA has retrospective powers going back to December 2025.

A business found to be non-compliant on NMW may find the FWA also examining SSP entitlement and holiday records during the same visit. These are not separate enforcement silos — they operate as a single compliance sweep.

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TL;DR — What You Need to Do Before April 7

• Check every deduction against the new £12.71/hour (21+) floor
• Audit pre- and post-shift working time — if it's required, it needs to be paid
• Update payroll for every age band, not just the headline NLW rate
• Review any salary sacrifice schemes to ensure no worker falls below NMW
• Check SSP configuration — day-one entitlement is live from April 6
• Ensure holiday records are being maintained — 6-year retention, criminal offence to destroy

Not sure whether your business is fully compliant? Take our free 3-minute Compliance Score quiz — 20 questions, instant results, no sign-up required.

👉 compliancealert.co.uk/compliance-score

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