HMRC has published its latest National Minimum Wage naming and shaming list, and the hospitality sector's representation in it should be a source of genuine discomfort for the industry. Of the 412 businesses named in the spring 2026 enforcement round, 200 — nearly half — are from hospitality: restaurants, pubs, cafés, hotels and takeaway businesses that HMRC's compliance teams identified as having paid workers below the minimum wage at some point in the preceding two years.
The collective underpayment across the named businesses is estimated at £1.4 million, affecting approximately 3,800 workers. All named businesses have been required to repay the underpaid wages, plus a financial penalty of up to 200% of the underpayment amount. The naming itself — the public disclosure of the business, the total underpayment and the number of workers affected — is a reputational consequence intended to deter non-compliance in the wider sector.
How the Underpayments Arose
HMRC's enforcement notes accompanying the naming round identify three primary mechanisms by which the hospitality businesses failed to meet minimum wage requirements.
The most common — appearing in approximately 40% of cases — is the deduction of uniform or workwear costs from wages in a way that reduced the effective hourly rate below the minimum. Hospitality employers who require staff to wear specific clothing and charge for it, or who make deductions for uniform cleaning or maintenance, must ensure those deductions do not reduce the effective hourly rate below NMW. This requirement is not new, but enforcement notes suggest that many operators either were unaware of it or had not reviewed their payroll practices following wage rate increases that reduced the headroom between the gross rate paid and the NMW threshold.
The second mechanism — appearing in approximately 30% of cases — is the failure to pay workers for mandatory pre-shift activities: uniform changes, briefings, security checks and similar requirements that happen before the clock-in time used for pay calculations. If an employer requires an employee to arrive fifteen minutes before their paid shift, those fifteen minutes are working time for NMW purposes.
The third and most topical mechanism — present in approximately 15% of cases and highlighted by HMRC as a growing area of focus — is the unlawful deduction or retention of tip and service charge income. The Employment (Tips, Gratuities and Service Charges) Act came into force in October 2024. Employers who have continued to make deductions from tip income — whether through administrative fees, partial retention in a house fund, or any other mechanism — are in breach of both the Tips Act and, where those deductions push the effective hourly rate below NMW, of minimum wage law.
The April Rate Increase Context
The timing of the announcement, two weeks after the April 2026 National Living Wage increase — the main rate rising from £11.44 to £12.21 per hour for workers aged 21 and over — is not coincidental. HMRC increases its compliance focus in the months immediately following rate increases, when the gap between old and new rates creates an elevated risk of businesses that have not updated payroll systems or practices remaining on the previous rate.
Operators who have not confirmed that their payroll systems reflect the new April 2026 rates as of 1 April should do so immediately. The exposure is not limited to current underpayments: HMRC investigations are retrospective and can recover underpayments going back two years, meaning that underpayments that began in April will be assessed alongside any earlier compliance failures if an investigation is triggered.
What the Naming Means in Practice
The businesses named in HMRC's list are published on the government's website and remain accessible indefinitely. For consumer-facing hospitality businesses, the reputational impact of appearing on the list is commercially significant: the combination of news coverage at the time of naming and persistent online visibility means that the naming follows the business for years. Several businesses from previous naming rounds report that the Google prominence of their naming continues to generate negative press and consumer commentary years after the underpayments were remediated and the penalties paid.
The practical step for hospitality operators is a payroll audit: confirming that the April rate increase has been implemented, reviewing deduction practices for uniform, workwear and pre-shift activities, and confirming that tip distribution complies with the 2024 Act. UKHospitality's free payroll compliance checklist, updated for the April 2026 rate changes, is available to members via its website.