9 things employers need to know about the NMW

Understanding the National Minimum Wage (NMW), alongside the National Living Wage (NLW), is essential to ensure fair pay and compliance with employment legislation.

The NMW and NLW increase in April each year. Understandably, this annual increase can have a big impact and may result in yards needing to consider potential cost-cutting measures to account for the change.

While this is not an easy thing to do, it is vital that employers stay ahead of the NMW and NLW increases and take the necessary action to adjust employee, worker or apprentice pay in accordance, as non-compliance can have serious repercussions.

This handy FAQ provides answers from the Employment Law team at HCR Wright Hassall to some of the frequently asked questions on wage regulations.

1. What is the Difference between the NMW and NLW?

Despite the differing names, the NLW is essentially an NMW for those aged 21 or over.

The NLW is an enhanced payment that some employees are entitled to. This payment varies depending on location (London having a higher living wage to reflect the cost of living in this area) and applies to those aged 21 or over. The NLW is designed to ensure fair pay is received, taking into account external factors, such as the cost of living.

The NMW is the minimum payment that eligible employees and workers (i.e. those working of at least school leaving age) are legally entitled to receive, regardless of the size of the business, per hour they work.

2. What are the changes to the current wage regulations?

The table below sets out the new NMW/NLW rates per hour from from 1st April 2026.

*apprentices rate is provided aged under 19, or aged 19 or over and in the first year of their apprenticeship. 

3. When do the NMW changes take effect?

The increase comes into effect on 1^st of April 2026, and employers are required to comply with the new wage rates from this date forward.

Employers who have any members of staff working night shifts should be aware that rates may change halfway through a shift and that wages should reflect this.

Wages must be paid at least once a month (or according to the agreed pay period), and employees must receive at least the National Minimum Wage for all hours worked in each pay period.

4. Why has the NMW been increased again?

Every year, the Low Pay Commission presents a recommended rate of NMW to the Government. This considers circumstances such as inflation and increases to the cost of living across the previous year to ensure fair compensation for employees and workers year on year. The EEA gathers views from its members and feeds into this consultation.

5. How will the NMW changes affect businesses?

Ultimately, employers are responsible for ensuring compliance with the minimum wage requirements.

Yards should take steps to ensure they are prepared for the wage increases and factor in the additional hourly costs their business will incur as a result.

In practice, this will mean checking which employees, workers and apprentices will be affected by the changes so that you can calculate their new wages accurately and begin paying them the new rates at the right time.

It is advisable that written communication is sent to employees, workers and apprentices affected by the wage increases, so they are aware these have taken place.

In the event that these changes pose problems for the financial stability of the business, employers will need to consider whether other action may be required to counter-act the financial burden.

6. What steps may employers need to consider?

In the event that employers feel they may be unable to retain their current workforce at their current hours with the increases coming into force, options to reduce costs will need to be considered.

Whilst there are a number of cost-cutting measures available that do not impact on existing employees (e.g. recruitment freezes or reducing overheads), it may be that these are not viable for the business or, even if they are, do not provide sufficient cost savings.

In this case, employers may need to consider other avenues, such as:

• Reducing hours of work – depending on the proposed reductions, this may amount to short-time working.
• Temporarily stopping work – for instance, lay-offs or unpaid leave being agreed.
• Introducing shift work.

In the event that the above measures cannot be agreed, or the business needs further cost savings, it may be that the employer needs to consider potential redundancies and undertake a redundancy process (in absence of voluntary redundancy being offered and agreed). It is important that any such process is carried out in accordance with the legal requirements, as employers may otherwise face the risk of Tribunal claims, such as unfair dismissal.

7. What happens if an employer does not comply?

Employers who fail to comply with the new NMW requirements may face penalties, legal action, and reputational damage. If HMRC finds that an employer has not been paying its employees, workers and apprentices the correct minimum wage, they can take any of the following actions:

Issue a notice to pay money owed to employees, going back a maximum of six years. Issue a fine of up to £20,000 and a minimum of £100 for each employee or worker affected, even if the underpayment is worth less. Take legal action, including criminal legal proceedings. Pass on the names of your businesses to the Department for Business and Trade (DBT), who will put them on a public list.

Employers can also be taken to an Employment Tribunal by their staff if they have not paid them the minimum wage in accordance with legal requirements. In this scenario, employees can claim up to two years of underpayment.

If an eligible individual is dismissed for raising concerns over the failure of the employer to pay minimum wage, they could also raise a claim for unfair dismissal.

Employers should always pay the minimum wage in accordance with the wage requirements. They face potential legal, financial and reputational risks in failing to do so. 

8. What will the wage increases look like in the future?

The Government generally reviews the NMW on an annual basis, with adjustments normally implemented in the April to closely align with the end of the tax year.

With things such as inflation, economic conditions, and cost of living taken into account, it is impossible to predict what future increases may look like however, businesses should prepare for increases to continue and make plans accordingly.

9. Where can I find more information?

Details of the NMW and NLW can be found:

On the Equestrian Employers website: Guide to the National Minimum Wage

On the gov.uk website: National Minimum Wage and National Living Wage rates - GOV.UK

The Employment Law Team at HCR Wright Hassall can also provide further guidance on employers’ duties or any other employment matters.