THE NATIONAL MINIMUM WAGE: ARE YOU UNKNOWINGLY BREAKING THE LAW?
The National Minimum Wage: Are you unknowingly breaking the law?
Some estate agency employers are at risk of falling foul of the National Minimum Wage (NMW) without realising it, either through miscalculation or outdated pay structures.
As a reminder, from 1st April 2025, the NMW rates were raised significantly to the following: £12.21 per hour for those aged 21 and over, £10.00 per hour for 18–20-year-olds and £7.55 per hour for apprentices and under-18s.
Why estate agents should be concerned
With frontline sales and lettings roles having historically been built around a modest basic salary topped up with commission, the typical hours worked in estate agency mean that the basic salary no longer meets the NMW on its own.
Take a typical working week in the sector of Monday to Friday 9am to 6pm plus alternate Saturdays 9am to 5pm. With lunch breaks thrown in, this adds up to roughly 175 hours a month. To comply with NMW, therefore, pay should not fall below c. £2,125 pm, the equivalent of over £25,000 pa.
So, if your staff are working similar hours and you are paying them a lower basic than this, you must have a guaranteed salary in place at this level to comply with the law. Failure to do so could lead to repayment of arrears, fines of up to £20,000 per worker, ‘naming and shaming’ by the HMRC, or even director disqualification.
The financial squeeze on estate agencies
These latest increases, along with the employers’ NIC hikes to 15%, are pushing many businesses to reassess their financial situation. Some have introduced reduced working hours to keep salaries compliant without ballooning their payroll costs. Others have rethought their commission structures entirely.
Their dilemma is clear:
- By raising basic salaries and reducing their commissions, sales incentive could well be weakened
- By keeping commission-heavy packages, estate agents could risk non-compliance in quieter sales months.
Rethinking pay structures in frontline sales and lettings roles
To stay compliant while still motivating staff, employers are looking at all sorts of options, including:
- Higher basic salaries with commission linked to clear performance thresholds
- Streamlined commission models tied directly to business goals
- Faster onboarding and better training to enable new hires to become more productive, faster
- Offering a wider range of employee benefits, such as flexible working, career progression and wellness support, all of which can keep roles attractive without relying solely on pay levels.
The bigger picture for estate agency
The NMW is rightly there to protect workers, but for estate agency employers it is also forcing a rethink of long-established commission-heavy pay structures. We believe that the businesses that adapt by modernising their packages and finding new ways to incentivise their staff won’t just avoid penalties. They’ll be better placed to attract talent, retain staff and build a more sustainable future.
