National Minimum Wage and National Living Wage
The National Minimum Wage (NMW) and National Living Wage (NLW) were introduced in order to promote fair rights for UK workers. It is a minimum amount that all employees are entitled to earn regardless of their job.
It is illegal for employees to pay their staff an amount that falls below this minimum wage; therefore it's important that you are aware of just what you should be paid.
How much is the National Minimum Wage and National Living Wage?
The National Minimum Wage level is reviewed each year by the government in October and is therefore subject to change. The National Living Wage is reviewed every April.
The current NMW hourly rates from October 2015:
The current National Living Wage
- Workers aged 21 to 24: £6.70
- Workers aged 18-20: £5.30
- Workers aged 16-17: £3.87
- Apprentice rate: £3.30 (for apprentices under 19 or over 19 in first year of apprenticeship)
(as from 1st April 2016)
- Workers aged 25 and over: £7.20
Anybody under the age of 16, or compulsory school age, is not entitled to a minimum wage.
Even if you start working for an employer and have previously signed a contract which states that you will be paid a figure that is less than the minimum wage, you are still entitled to receive it.
In this case, your former contract becomes invalid and your employer will need to amend the contract to reflect the correct wage.
Remember, it is actually illegal for a company to pay its employees less than the minimum wage they are entitled to.
How do I know if I am entitled to National Minimum Wage?
The UK's jobs market is made up of a huge variety of job types such as contractors, part time workers, home workers, apprentices, temporary workers, agricultural workers, migrant workers and more. Because of this there is often some confusion as to whether certain groups are considered to be 'workers' for minimum wage purposes.
Information on whether or not you are classed as a 'worker' and therefore entitled to the national minimum wage is available on the Government website www.gov.uk
, however, here is an overview of the main differences:
Temporary or Agency Workers
If you work for an agency, it is usually the agency themselves who pay you and act as your employer. As such, they are obliged to pay you the correct minimum wage and will negotiate a rate with the company you are working for, in order for you to receive the amount you are entitled to.
If you are a foreign worker, i.e. have come from outside of the UK in order to work, you are still entitled to receive the national minimum wage. This is regardless of how long you have been in the UK and also regardless of where the company you work for is actually based.
Agricultural workers in the UK are governed by a separate set of pay rates known as the Agricultural Minimum Wage. These wages are often higher than the national minimum wage and it is illegal for workers who fall within this group to be paid less than this.
Working from Home
If you work from home on behalf of another company, you are entitled to the minimum wage just as any colleagues working from an office would be.
If you are a registered apprentice taking part in a UK scheme such as an Advanced Apprenticeship, Modern Apprenticeship, Job Skills Traineeship or Apprenticeship, then you are entitled to receive the national minimum wage. However, an additional requirement is that you are aged 19 or over and have completed the first year of your chosen scheme.
Sales / Commission based workers
Whether you are paid wholly or partly on your 'results', you are legally entitled to receive the national minimum wage.
Why may you not be eligible for national minimum wage?
In specific circumstances, some workers are not entitled to the minimum wage. Again, a full list of these can be found at Direct.gov however here is a brief summary of the main exceptions:
Self - employed
If you run your own business you are not entitled to receive the minimum wage. Likewise if you work for another company but are classed as 'self-employed' (for example, some taxi drivers or couriers are self employed but operate under the umbrella of a larger organisation) you are also not entitled to the national minimum wage.
A voluntary worker is someone who has a contract of employment to perform work for a charity, voluntary organisation or fundraising body. In this case you would not be entitled to the minimum wage and should only receive limited reward in the form of expenses or benefits in kind.
Workers on work experience that lasts less than a year are not entitled to a minimum wage.
Government programmes for employment
If you are taking part in a government scheme designed to assist you with training or to help you get back into work, you may not be entitled to the minimum wage. However, it's important to check whether the programme you are registered with offers this or not.
What if your employer will not pay you the National Minimum Wage?
If you believe that you are entitled to receive the minimum wage but your employer disagrees, you can seek help and advice from the Pay and Work Rights Helpline, a confidential government service that can assist you with enforcing your rights as an employee.
Their advisors can help you lodge a complaint against your employer and ensure that your individual rights as a worker are upheld. If it is determined that your employer is acting illegally, then your case will be forwarded on to HM Revenue and Customs who will take the appropriate action against your employer.
The Pay and Work Rights helpline can be contacted on 0800 917 2368 or by visiting this page