There is now in effect in the United Kingdom a National Living Wage (NLW) for those over 25 and a National Minimum Wage (NMW) for those under 25.
This is the minimum amount of gross pay per hour that an employer must pay an employee depending upon their age.
Rates of pay
National Living wage for workers over 25 is £7.50 per hour (from 1 April 2017)
National Minimum Wage – People aged 21 to 24 must be paid at least £7.05 per hour
National Minimum Wage – Between the ages of 18 and 20 an employee must be paid at least £5.60 per hour
National Minimum Wage – Between the ages of 16 – 17 an employee must be paid at least £4.05 per hour
National Minimum Wage – Apprentices must be paid £3.50 per hour
The remuneration being received by an employee will be made up of many items such as a basic wage, bonuses, incentives, in some cases accommodation, clothing allowances, shift allowances etc. What is allowed and what is not allowed in calculation of the basic minimum wage is dependent on each case and expert advice should be sought.
The hours for which the employer must pay at least the national minimum wage are calculated differently according to the type of work done. There are four types of work:
- Employees paid for working a set number of hours, or a set period of time, are doing timework
- Employees who have a contract to work for a set number of basic hours each year in return for an annual salary paid in equal instalments (for example each week or each month), are doing salaried hours work
- Employees paid according to the number of things they produce or the number of deals or sales that they make are doing output work. In this case there is an option for the employee to have a written agreement with the employer stating a ‘fair estimate’ of the number of hours they should work.
- If the employees have to do a number of specific tasks, but do not have any set hours, they are doing unmeasured work. Again, there is an option for them to have a written agreement with their employer setting out the average number of hours they should work each day.
Who is entitled to it?
The following are entitled to NMW or NLW:
- agency workers,
- home workers
- commission workers
- part time workers
- casual workers
Who is not entitled to it?
There are a number of people not entitled to the NMW or NLW. These include:
- Self employed people;
- Company Directors;
- Family members living in the family home and undertake household tasks.
Non payment of NMW or NLW
If an employee is entitled to the national minimum wage, the employer cannot force him/her to accept a lower rate of pay. Even if the employee has signed a contract agreeing to receive a lower rate of pay, this will have no legal effect.
If a worker is not being paid the NLW or NMW to which they are entitled they should lodge a grievance with their employer. If the employer does not rectify the situation, the worker can make a complaint to the HMRC who will investigate and can send a notice of arrears to the employer plus a penalty for not paying the correct level of wages.
If the employee thinks that he/she is being paid less than the NMW or NLW, the employee has a right to see his/her records about it. As long as the employee makes his/her request in writing, the employer must by Law supply the records within 14 days. If the employer refuses to let the employee see his/her records, the employee can lodge a complaint with an Employment Tribunal (which, if it upholds the complaint, will order the employer to pay compensation equivalent to 80 hours’ pay at the minimum wage rate).
Employees are legally protected against being sacked or victimised by employers over asserting their entitlement to the NMW or NLW and over any action they may take to enforce their rights through the Employment Tribunal.
If the employee is owed back pay for non payment of the NMW or NLW, the employee can bring a claim to the Employment Tribunal for Unlawful Deductions of Wages (limited to a 2 year backdating period).
If you are owed money for non payment of the NMW or NLW or have otherwise suffered a detriment (including dismissal) because you have asserted your legal rights to be paid the NMW or NLW with your employer, contact one of our specialist No Win No Fee Employment Law Solicitors today by calling: 0800 612 9509 or by completing one of our online contact forms.