Government Recovers £7.4 Million for Underpaid Workers in Latest Move to “Make Work Pay”

Nearly 60,000 workers left short-changed by their employers will now be repaid more than £7.4 million, the Government announced this week, in its latest drive to “Make Work Pay.” The announcement underscores the government’s wider economic agenda to grow the economy and ensure working people are financially secure.

The action follows recent moves including the largest ever uplift to the National Living Wage and National Minimum Wage, adding £1,400 a year to the pay packets of full-time workers on the NLW. These changes form part of the government’s Plan for Change to support working families and raise living standards across the country.

A total of 518 employers have been named and shamed for failing to pay their staff correctly. All have since paid back what they owed and faced financial penalties of up to 200% of their underpayments. The cases were investigated by HM Revenue and Customs (HMRC) and concluded between 2015 and 2022.

Minister for Employment Rights, Justin Madders, said:
“There is no excuse for employers to undercut their workers, and we will continue to name companies who break the law and don’t pay their employees what they are owed.

Ensuring workers have the support they need and making sure they receive a fair day’s pay for a fair day’s work is a key commitment in our Plan for Change. This will put more money in working people’s pockets, helping to boost productivity and ending low pay.”

Baroness Philippa Stroud, Chair of the Low Pay Commission, added:
“We welcome today’s publication. Underpayment leaves workers out of pocket and disadvantages the majority of employers who do abide by the rules.

These naming rounds play an important part in ensuring that all workers receive their full wages and that they are aware there is support for them to ensure that they do.”

The government emphasised that while some underpayments may not be intentional, it will continue to take robust enforcement action against any employer who fails to comply with the law. It also highlighted the long-term benefits for businesses in adhering to wage regulations — noting that better pay contributes to increased financial stability, higher staff retention, and lower recruitment costs.

“Putting more money into the pockets of the lowest paid increases workers’ financial security, offers stability to help increase staff retention and lowers recruitment costs for businesses in the long run,” said a government spokesperson.

Supporting Business While Raising Standards

In a further effort to support businesses and workers alike, the government also confirmed that ahead of plans to permanently lower tax rates for retail, hospitality, and leisure (RHL) sectors from 2026/27, it has extended the current RHL relief for an additional year. This ensures that more than 250,000 RHL properties will continue to benefit from a 40% reduction in business rates, with the small business multiplier frozen.

Education for Employers

Recognising that compliance issues are sometimes due to misunderstanding rather than malice, the government today also published a new educational bulletin aimed at raising awareness of National Minimum Wage legislation. The bulletin provides guidance to employers to ensure they’re paying their workers correctly and avoiding future penalties.

The reforms are being hailed as a landmark step in worker protection and part of the broader Employment Rights Bill — dubbed the biggest upgrade to workers’ rights in a generation — cementing the government’s commitment to fair pay, robust enforcement, and long-term economic stability.