National Minimum Wage

The National Minimum Wage is a legal obligation which must be met by employers and which covers almost the entire UK workforce in order to prevent the exploitation of staff.

Does Everybody get the Same Amount of Pay?

There are 3 separate tiered structures of pay to which workers are entitled as a minimum hourly rate at which they must be paid. The youngest members of the workforce 16 to 17 year olds, must be paid at least £3.30 per hour. For 18 to 21 year olds, the minimum wage is £4.45 per hour and, for those who are over 22 - £5.35 per hour.

Exceptions can include where those who are over 22 can still be paid the lower rate of £4.45 per hour for the first 6 months of new employment, providing they are also receiving accredited training and that the worker and employer have agreed that the worker will attend the training for a minimum of 26 days over the course of the first 6 months in a new job. If training isn’t offered, then the worker must be paid at the full adult rate of £5.35.

Other exceptions relate to those who are undertaking apprenticeships whereby those who are under 19 are not entitled to the minimum wage.

The Rights of Workers

Those who think they have been treated unfairly and are not receiving their minimum wage entitlement can contact the DTI’s National Minimum Wage Helpline where their case will be investigated further. Alternatively, providing they meet the criteria, a worker can also take his/her case to a civil court or pursue the matter through an employment tribunal. They can also resort to a tribunal if they are dismissed for pursuing their perceived rights to be paid the minimum wage as this would be construed as unlawful dismissal.

The Responsibilities of Employers

If employers opt to only pay their staff the minimum wage, they must keep adequate records to show that they are complying with the law. These records are crucial in case they have to be used in a dispute where the burden of proof lies with the employer to demonstrate that they have been abiding by the law. Records may include gross pay payments, records of employee absence, payments for shifts and overtime and contracts of employment between employer and worker. Failure to produce such records, if asked to do so, can result in a fine and is a criminal offence.

Exemptions

Certain groups of workers are not covered under the legislation. They include workers who are based permanently outside the UK, including those who are based in the Isle of Man and the Channel Islands, those who are legitimately self-employed and voluntary workers.

Categories of Employment

For the purpose of the National Minimum Wage legislation, workers are divided up into 4 distinct groups:

• Salaried workers – Those who are paid for a preset number of working hours over the course of any given year and who receives their pay in equal installments.

• Output or ‘piece’ workers – Those who do not necessarily have any fixed hours of work but are paid per item produced or task carried out.

• Time workers – Factory workers, for example, who are paid according to the number of hours, put in over the course of the working week, regardless of when the hours are worked.

• Unmeasured workers – Domestic staff, for example, who are paid according to certain tasks and perform these duties over varying hours.

For more detailed information about the National Minimum Wage, the DTI’s website is a useful resource tool.