Below are some points which need to be taken into consideration in order to meet the minimum wage obligations set by the government. The Low Pay Commission have issued a report which highlights there has been a steady increase in underpayments to employees since the introduction of the National Living Wage in 2016.
What is the National Minimum Wage?
The minimum wage is paid at an hourly rate, with payment bands depending on age and with special provisions applying to apprentices. The National Living Wage (NLW) applies to those aged 25 and over, whilst the National Minimum wage (NMW) applies to those between the 16 and 25. Here, we refer to ‘minimum wage’ to accommodate both.
What is pay?
Classification of pay for minimum wage will include normal ‘basic’ pay, plus any incentive or bonus payments
What is not pay?
Payments for loans, tips and gratuities, wage or salary advances, pension payments and rewards for staff suggestion schemes are excluded
What is working time?
Working time includes travelling from one work assignment to another or waiting to collect goods. HMRC reports errors around failure to pay travel time correctly
If there is an apprenticeship contract in place along with an element of structured training, this qualifies the employee as an apprentice. The apprenticeship rate applies only if an apprentice is under 19, or over 19 and in the first year of their apprenticeship.
The minimum wage is a complex area, and we have only been able to touch on key points here.
General information for employers can be found:
Website – National Minimum Wage
For a more detailed guidance – National Minimum Wage Manual
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