Rate of record
Back-pay rights for minimum-wage underpayment
Arrears are recoverable for six years. The quirk: arrears are paid at the current NMW rate, not the rate in force when the underpayment happened. That can roughly double the cash recovery.
The six-year window
HMRC/FWA can recover arrears for any pay reference period within the last six years from the date of investigationgov.uk. The clock starts at the period in question, not at the discovery.
The current-rate quirk
Arrears are calculated at the rate in force today, not the rate in force at the time of the underpayment. A 2019 weekly shortfall of £20 at the then-rate could land at over £30 in 2026 arithmetic, before any penalty. For long-running breaches this quirk roughly doubles the cash recovery.
Three routes
- HMRC / Fair Work Agency: free, anonymous, statutory penalty applies to the employer, but no interest awarded to the worker.
- Employment Tribunal: claim under section 23 of the ERA 1996 for unlawful deductions, including interest. Three-month time limit.
- Civil claim: county court for breach of contract. Six-year limit. Slower; usually a fall-back.
Interest
HMRC/FWA does not award interest on NMW arrears. An Employment Tribunal can. If interest is material, the tribunal route is worth considering - though the three-month deadline from the last unlawful deduction bites.
Report this to HMRC or the Fair Work Agency
Underpayment is enforceable. Workers can report anonymously and arrears are recovered at the current rate, not the historic rate.