Who is liable for enforcement of the National Minimum Wage after a TUPE transfer?

HMRC has confirmed liability for historic national minimum wage underpayments or related penalties are to be enforced against the new employer – irrespective of whether the new employer was responsible for the underpayment/penalty. Previously the former employer was responsible for any liabilities that had accrued up to the transfer date.

The financial penalty for an employer in breach of the national minimum wage requirements can be up to 200% of the total pay arrears, capped at £20,000 per worker.

This change may result in significant additional costs for an employer taking on employees after a TUPE transfer. Businesses should ensure they carry out sufficient due diligence on pay terms ahead of any transfer to avoid being caught out by any nasty (and expensive) surprise.

It may also be appropriate to negotiate appropriate warranty and/or indemnity protection in the commercial agreement where possible.

FREE first advice

Have you ever wanted to just ask an expert employment law solicitor if they can help you, without worrying about what it may cost to contact them?

Get in touch

We’d like to talk to you to see what we can do to help, so please either call us anytime for free on 08000 614 631, email us or use the form below.

Together we can work out what your next steps might be...in confidence, at no cost and with no obligation.


* indicates required
McCabe and Co Solicitors will use the information you provide on this form to be in touch with you and to provide updates and marketing. Please let us know all the ways you would like to hear from us:
You can change your mind at any time by clicking the unsubscribe link in the footer of any email you receive from us, or by contacting us at philip@mccabeandco.com. We will treat your information with respect. For more information about our privacy practices please visit our website. By clicking below, you agree that we may process your information in accordance with these terms.
We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.