What is the National Minimum Wage?
How much is the National Minimum Wage?
The National Minimum Wage varies depending on a person’s age and whether they are an apprentice or not. Presently the rates are:
- 25 and over : £7.20
- 21 to 24 : £6.70
- 18 to 20 : £5.30
- Under 18 : £3.37
- Apprentice rate: £3.30
The rate for apprentices is the amount due to apprentices under 19 or those who are in the first year of their apprenticeship. These rates do increase over time, although new rates of pay are announced in advance by the Government.
Who is entitled to the National Minimum Wage?
To be entitled to the National Minimum Wage workers must be of school leaving age. This means it must be after the last Friday in June of the school year in which they turned 16. Workers are entitled to the National Minimum Wage regardless of whether they are full time or part time.
However there are some people who aren’t entitled to the National Minimum Wage. This includes self-employed people who run their own businesses, company directors, volunteers, workers on government employment programs, family members of the employer who live with their employer, non-family members who live with their employer, who share in both work and leisure activities and aren’t charged for their meal or accommodation, members of the armed forces, prisoners and more.
You are also not entitled to the National Minimum Wage if you’re a student doing work experience (as part of a higher or further education course),of compulsory school age, a volunteer, on a government or European program or work shadowing.
What is the difference between a worker and a volunteer?
What if I don’t pay my employee the National Minimum Wage?
It is a criminal offence to pay someone who qualifies for the National Minimum Wage under it or to falsify payment records. If it is discovered that a worker has been paid below the National Minimum Wage then their employer must pay any arrears immediately.
HMRC officers have the right to check payment records of employers at any time and can also investigate an employee’s complaint regarding this.
If HMRC finds that an employer hasn’t been paying the correct rates then any arrears will need to be paid the employee in question immediately and HMRC will impose a penalty on the employer. In addition to this the employer can be named by the government. It’s the employer’s responsibility to keep records proving they have paid the National Minimum Wage for the last 3 years at least. Payroll records are used by most employers as proof.
Is there anything else I should know?
It is important to know what should be included in an employee’s National Minimum Wage and what shouldn’t. The National Minimum Wage should not include payments that cover things for the employer’s own use or benefit, such as travel expenses, as well as things that the employee bout for the job and isn’t refunded for.
The National Minimum Wage does include, PAYE Tax and National Insurance contributions, wage advances and loans, along with their repayments, things the worker paid for that were not needed for the job (or paid for voluntarily), penalty charges for a worker’s misconduct and accommodation provided by an employer above the offset rate.