£7m-worth of fines recently handed to organisations including B&Q and Five Guys demonstrates how challenging it is to ensure a business is minimum wage-compliant. In the first of a two-part series, Payroll specialist Fiona Ireland looks at the common payroll mistakes businesses make that can lead to non-compliance and potentially significant financial penalties.
Staying minimum wage-compliant is now more complex than ever
For those in Payroll, the ‘naming and shaming’ of Five Guys, B&Q and others in September 2026 came as no surprise. Processing minimum wage payments correctly is complex, especially for sectors like retail, hospitality and agriculture.
Since the announcement, many have asked me this: If major brands struggle to get it right, how can I ensure my business is minimum wage-compliant? To be compliant, there are several payroll pitfalls business owners need to avoid.
Payroll mistake 1: Pre- and post-shift extras
When an employee incurs additional working time for pre- and post-shift responsibilities, this can count towards the calculation of their hourly rate. Examples of additional tasks include:
- Mandatory handovers
- Opening or closing duties
- Mandatory security checks
- Changing for work
An employer paying the correct hourly rate may not be minimum wage-compliant if employees regularly work extra time that isn’t recorded.
Payroll mistake 2: Uniforms, equipment and work expenses
Where employees have to pay for work-related items or expenses, those costs can reduce the pay that counts towards the minimum wage. Common examples include:
- Uniforms
- Personal Protective Equipment (PPE)
- Tools or specialist equipment
Simply having a contractual agreement allowing the deduction does not necessarily mean it is minimum wage-compliant.
Payroll mistake 3: Training and mandatory qualifications
If training, exams or assessments are required by the employer, or connected with the nature of the job, costs charged to the employee can reduce their minimum wage pay. This still applies even if the cost is deducted from their final salary.
Payroll mistake 4: Accommodation deductions
Employer-provided accommodation has special minimum wage rules and a specified accommodation offset. When an employer charges above the permitted offset for accommodation, this can impact whether the business remains minimum wage-compliant.
Payroll mistake 5: Meals and staff benefits
In some circumstances, salary deductions for employee meals can reduce minimum wage pay. Employers must be cautious and should not assume that because an employee has agreed to the deduction, it is irrelevant to minimum wage calculations.
Helping businesses ensure National Minimum Wage compliance
Drummond Laurie’s specialist Payroll advisors help businesses stay minimum wage-compliant. Across hospitality, agriculture, manufacturing and many other industries with complex minimum wage calculations, we are on hand to provide advice and guidance to make sure you get payday right every payday.
For an initial discussion about outsourced Payroll services from Drummond Laurie Chartered Accountants, get in touch with Fiona Ireland.
Follow Drummond Laurie Chartered Accountants on LinkedIn, Facebook and X for part 2 of our Minimum Wage payroll checklist.