The national minimum wage (NMW) applies to all workers and is paid at different rates according to age. There is a separate rate for apprentices, and a National Living Wage (NLW) applies to workers aged 25 and over. The current and future rates for the minimum wage (which represents gross pay) are as follows:
|Age||Rate from 1 April 2016||Rate from 1 October 2016||Rate from 1 April 2017||Rate from 1 April 2018|
|Workers aged 25 and over (NLW)||£7.20 an hour||£7.20 an hour||£7.50 an hour||£7.83 an hour|
|Workers aged 21 and over||£6.70 an hour||£6.95 an hour||£7.05 an hour||£7.38 an hour|
|Development rate for workers aged 18-20||£5.30 an hour||£5.55 an hour||£5.60 an hour||£5.90 an hour|
|Young workers rate for workers aged 16-17||£3.87 an hour||£4.00 an hour||£4.05 an hour||£4.20 an hour|
|Apprentices under 19, or over 19 and in the first year of the apprenticeship||£3.30 an hour||£3.40 an hour||£3.50 an hour||£3.70 an hour|
- All workers, except those who are genuinely self-employed, are entitled to receive the NMW/NLW
- Gross pay is used to calculate whether an eligible worker has been paid the minimum wage
- The NMW/NLW is calculated by including most financial awards or payments, but excluding allowances such as regional or on-call allowances, unsocial hours payments, tips and gratuities, or any benefits in kind, with the exception of accommodation up to a specified amount
- Employers can average the hourly rate of pay over the pay period
- Non-compliance can result in an enforcement notice requiring the employer to pay the difference between what was actually paid and what the worker should have received under the NMW legislation. Further non-compliance could result in the issue of a penalty notice and financial penalties.
- The government expects the rate to rise to over £9 by 2020 (a government policy paper explains the thinking behind the NLW).
During 2017, Matthew Taylor published a review which, amongst other things, suggested that a higher minimum wage rate should be introduced for zero hours workers. The government stated they would respond to the review by the end of 2017, although this was delayed to the beginning of 2018. The government has now released their response to the Taylor report and have announced they will ask the Low Pay Commission to assess the impact of introducing a higher minimum wage rate for working hours that are not guaranteed under an individual's contracts.
A focus on the use of unpaid internships, and the exploitation of these, was also announced. The government has announced an initiative to tackle the illegal use of unpaid internships and the HMRC will be tasked with carrying out enforcement action in this area. Our news article explains more.