What is the UK National Minimum Wage?

The national minimum wage (NMW) first came into force on 01 April 1999 bringing in a new statutory minimum wage which all employers at least must pay to their workers per hour. The NMW encompassed a tier structure which provided for different levels of pay dependent on the age of the worker.

The different NMW pay levels are increased incrementally almost every year. Fast forward to 2015 and the national minimum wage bands in UK currently are:

  • Workers 21 years of age and over – £6.70
  • Workers 18-20 years of age – £5.30
  • Workers under 18 years of age – £3.87
  • Qualifying apprentices – £3.30 (this increase means that those working 40 hours a week will now have £1,185 more in their pay packet over the year – largest apprentice rate increase ever!)

 

From 01 April 2016, there is a further band for workers aged over 25. This will initially be £7.20 per hour, increasing to £9 per hour by 2020.

Can My Employer Deduct Money From my Wages?

The general rule is that employers cannot deduct monies from a worker which has the effect of taking the worker’s wage to below the threshold of the national minimum wage (although there are a few exceptions). The most common issues which arise are in relation to employers deducting monies from the worker’s wage to pay for expenditure in connection with employment, i.e. the purchase of tools, equipment or uniform which takes the worker’s pay below the NMW threshold.

The latter has been evidenced recently following the Government’s release of their yearly “name and shame” list of employers who have failed to pay the NMW. It has been disclosed that Monsoon Accessorize have failed to pay a total of £104,508 to 1,438 workers. Monsoon Accessorize have explained that they had a policy of offering discounted clothing (to wear at work) to its workers which was then deducted from their salary which therefore took the workers’ wage below the NMW.

This recent example illustrates the confusion which still surrounds the NMW and what deductions can and cannot be taken into account when calculating the workers’ pay.

If you want to discuss the national minimum wage and how it applies to you or your business, please give our specialist employment team a call on 0113 244 9931.

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