National Minimum Wage
The National Minimum Wage (NMW) is the minimum hourly rate most workers are entitled to.
- Most workers over school leaving age will be entitled to receive the NMW.
- The NMW rate is reviewed annually by the Low Pay Commission, and any rate changes are introduced in October each year.
- There are a number of exemptions to those who receive the NMW. These do not relate to the size of the business, sector, job or region.
- HM Revenue & Customs (HMRC) can take employers to court for not paying the NMW.
- The minimum rate depends on the age of worker.
The current NMW rates from 1 October 2015 are:
- £6.70 for workers 21 and over
- £5.30 18-20 yrs
- £3.87 for 16-17 yrs, who are above school leaving age but under 18
- £3.30 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.
It is important to note that these rates, which come into force 1 October 2015, apply to pay reference periods beginning on or after that date.
Minimum wage calculator
Find out what you are entitled to receive using Helpline Online:
2015 National Minimum Wage increase video
Acas Adviser, Joe Tivy, provides key information about the 2015 National Minimum Wage rate increase on 1 October 2015.
Working Time Directive - Mobile workers - September 2015
The European Court of Justice in a recent case gave the judgement that mobile workers who have no fixed place of work, and spend time travelling from home to the first and last customer should have this time considered as working time. The Court add that because the workers are at the employer's disposal for the time of the journeys, they act under their employer's instructions and cannot use that time freely to pursue their own interest.
Acas is assessing the impact of this judgement on workers and employers in Great Britain, including whether it has any effect on the payment of the National Minimum Wage, and will provide more detailed guidance when it is available.
The National Living Wage
A compulsory National Living Wage is due to be introduced in April 2016 for all working people aged 25 and over, and will be set at £7.20 per hour. The current National Minimum Wage for those under the age of 25 will continue to apply.
The Low Pay Commission which currently recommends the level of the minimum wage will recommend any future rises to the National Living Wage rate.
The new National Living Wage is different from the Living Wage, which is an hourly rate of pay set independently by the Living Wage Foundation and is calculated according to the basic cost of living in the UK.
If an employer doesn't pay the correct rate, a worker should talk to their employer and try to resolve the issue informally first. If this doesn't work a worker may make a formal grievance to their employer.
A worker can also make a complaint to HMRC who will investigate the complaint. If HMRC find that an employer hasn't paid at least the National Minimum Wage, they can send a notice of arrears plus a penalty for not paying the correct rate to the employer.
It is against the law for employers to pay workers less than the National Minimum Wage or to falsify payment records.
To find out more about the National Minimum Wage call the Acas helpline on 0300 123 1100.
There are a number of people who are not entitled to the NMW.
- Self-employed people.
- Volunteers or voluntary workers.
- Family members, or people who live in the family home of the employer who undertake household tasks.
- Company directors.
All other workers including pieceworkers, home workers, agency workers, commission workers, part-time workers and casual workers must receive at least the NMW.
From the 1 October 2013, the Agricultural Wages (England and Wales) Order 2012 no longer applies in England. Agricultural and horticultural workers in England employed after that date must be paid the appropriate NMW rate (see above).
Workers who were already employed before 1 October 2013 will still be entitled to the same terms and conditions set under their contract of employment; this may include overtime rates, agricultural wages, sick pay or dog allowance. Defra will continue to enforce complaints made by workers in respect of underpayments or non-compliance with terms and conditions of an Agricultural Wages Order before 1 October 2013 for up to six years after the breach occurred.
For agricultural workers in Scotland there is no change, and in Wales workers must be paid at least the Agricultural Minimum Wage, or the NMW if that's higher.
Family member exemption
For this exemption to apply, workers must either be a member of the employer's family, or live in the employers' family home.
Either the worker is a member of the employer's family and:
- resides in the family home of the employer
- shares in the tasks and activities of the family.
Or the worker resides in the family home of the employer, and:
- is not a member of that family, but is treated as such (in regards to the provision of living accommodation, meals and the sharing of tasks and leisure activities)
- is neither liable to any deduction, nor to make any payment to the employer, or any other person, as respects the provision of the living accommodation or meals
- if the work had been done by a member of the employer's family, it would not be treated as work.
Call our Helpline on 0300 123 1100 for free support and advice or to check your workplace policies and practices. The Acas Helpline provides free and impartial advice for employers, employees and representatives on a range of employment relations, employment rights, HR and management issues.
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