National Minimum Wage

Clare Parkinson

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01 Jan 2019

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The National Minimum Wage (NMW) receives a review every year. There’s no commitment to increase the amount, but the hourly total does change from time to time.

If you pay any of your staff the NMW and you fail to increase their pay correctly, you could be breaking the law.

In the past, organisations have been publicly named and shamed, as well as given a hefty fine.

With that in mind, here’s everything you need to know and how to remain compliant with the changes.

 

What is the national minimum wage?

The NMW came into force in July 1998 via the National Minimum Wage Act. It defines a minimum hourly rate you should pay your employees and workers.

But when does the national minimum wage go up? The NMW rates are subject to review and change in April every year.

 

The National Minimum Wage rates

Because the rates change, it’s important to keep on top of them. It’s worth reviewing your pay structure every April to ensure you’re not dipping below the legal requirement.

The hourly rate depends on the individual’s age, and whether or not they’re an apprentice.

The current National Minimum Wage for 2019 is as follows:

  • Apprentice: £3.90
  • Under 18: £4.35
  • 18-20: £6.15
  • 21-24: £7.70
  • 25 and over: £8.21

The new National Minimum Wage rates for 2020 and beyond aren’t available yet. But, we’ll provide updates as and when the information becomes available.

 

The National Minimum Wage over age 25

The rate for 25 and over applies to every age over 25. A 70-year-old will earn the same on the NMW as a 30-year-old.

 

Do I have to pay the National minimum wage to apprentices?

You have to pay at least the NMW, yes. But you can choose to pay more if you feel it’s appropriate.

But there are other rules when it comes to apprentices and minimum wage. When they reach a certain age, the situation changes—another is when they’re no longer in the first 12 months of their apprenticeship.

 

How do I ensure I’m paying the NMW?

A common reason employers get caught out is they deduct the cost of uniforms and other expenses from employees’ wages. This dips them below the national minimum wage.

Another reason for these types of dips in pay is the failure to pay for travel time where travel is a crucial part of the individual’s job role.

The national minimum wage in the UK is taken very seriously, and failure to pay it has severe consequences.

To ensure compliance it’s worth conducting a salary benchmarking review. This has the additional benefit of keeping your rates competitive.

Also, keep an eye out for any case law updates on pay—you can find these types of updates on our blog.

 

Expert support

If you still have queries about the national minimum wage, speak to a Croner expert on 0808 145 3380.

About the Author

Clare Parkinson has over 20 years’ experience in the Croner Reward business. As Business Manager, Clare leads a team of Reward Consultants who specialise in the delivery of pay and grading related advice, including tailored pay benchmarking and gender pay reports.

Over the years, Clare has contributed to various industry publications on topics such as gender pay, executive remuneration and market pay trends.

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