National Minimum Wage

Question.

I am in the process of starting my own business and estimate I will need to employ 4 full-time, 2 part-time employees and 2 apprentices. Can you advise of any minimum rates of pay that would be applicable to each?

Answer.

All employees over the school leaving age who are working in the UK are entitled to receive the National Minimum Wage (NMW). The NMW is the minimum pay per hour that employees are entitled to receive by law. All employers have to pay the NMW to all qualifying employees based on their age and if they are in an apprenticeship. The law applies to all employees including full-time, part-time, casual workers, agency, apprentices, trainees and those on probation.

The National Minimum wage rates increase each year and from 1 October 2015 the new rates will be as follows: Workers aged 21+ will increase from £6.50 per hour to £6.70 per hour. Workers aged 18-20 will increase from £5.13 per hour to £5.30 per Hour. Workers aged under 18 will increase from £3.79 per hour to £3.87 per hour. Apprentices under the aged 16-18 or aged 19 and over and in their 1st year of their apprenticeship will increase from £2.73 per hour to £3.30 per hour. Apprentices over the age of 19 and who have competed the first year of their apprenticeship are then entitled to NMW for their age.

It is the employer’s responsibility to pay employees at least the NMW rate they are entitled to for each hour worked and to keep records proving they are paying NMW. Any agreements entered into with an employee to pay them less than the NMW are not legally binding and the employee is still entitled to the NMW at the relevant rate.

As an employer, failure to meet your obligations under the National Minimum Wage Act or to falsify payment records constitutes a criminal offence and could result in a fine.

The advice above is specific to the facts surrounding the questions posed. Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.

Email r.emery@pkffpm.com