Case Study - National Minimum Wage Risk Audit

Scene setting

A large hospitality employer operating several venues and employing around 1,300 staff engaged our services after attending a payroll compliance presentation.

The payroll manager sought expert reassurance that their business had no hidden National Minimum Wage risks, especially with complex shift patterns, varied roles, and evolving pay practices common in the sector.

With reputational, financial, and operational risks associated with NMW noncompliance, early detection and mitigation were key priorities.

The action

Our work began with a thorough evaluation of employment contracts, internal pay policies, timekeeping approaches, and payroll records, spotting potential NMW "red flags" such as unpaid uniform requirements, workwear deductions, time rounding practices, and historical underpayments. We facilitated a virtual NMW discovery workshop, bringing together stakeholders from payroll, HR, finance, and operations.

The workshop encouraged open discussion and helped uncover both current and historical vulnerabilities. Together with the client, we created a NMW risk document clearly mapping identified risks and delegated targeted actions to a newly formed NMW working group.

The working group met regularly, maintaining momentum and oversight. Historic payroll errors were identified, quantified, and analysed. All arrears due (totalling approximately £120,000) were calculated, appropriately uplifted, and repaid directly to affected employees.

We also drafted communication scripts so staff were fully informed of the arrears process and the business’s commitment to righting any historic underpayments.

The results

The client was able to complete a full NMW risk mitigation and repayment program independently of any HMRC investigation.

As a result, they avoided the significant additional penalty exposure that would have accompanied an HMRC intervention (potentially an extra £240,000 in penalties) and entirely bypassed the reputational risk of being publicly named. The employer now holds detailed records of the audit, risk assessment, and remediation steps, empowering them to demonstrate proactive compliance should HMRC ever review their business in the future.

The process not only protected the business but also reinforced trust and transparency with employees.