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Applying the National Minimum Wage

Not everyone in the UK likes the national minimum wage, and it was embraced in other parts of Europe before becoming part of our law around 10 years ago.

National minimum wage law

The national minimum wage (NMW) became law on 1 April 1999 to prevent unduly low pay and also to help create a level playing field for employers.

The number of hours for which you have to pay your workers the minimum wage is calculated differently according to the types of work they do. These are based on time, salaried-hours, output and unmeasured work.

Employers are legally required to keep sufficient records showing you are paying your workers at least the NMW. If your workers are paid well above the minimum wage, existing payroll and business records will be sufficient and there will be no need to maintain separate records. These mainly include PAYE and National Insurance records.

National minimum wage rates

National minimum wage rates are based on age, and are broken down into three groups

The main (adult) rate applies to workers aged 22 and over and is currently £5.73 per hour.

The NMW development rate is £4.77 per hour and applies to 18 to 21-year-olds.

Finally, for 16 to 17-year-old workers who are above school leaving age the rate is currently £3.53 per hour. Apprentices under the age of 19 are not entitled to the NMW and apprentices over 19 are exempt in their first year.

Compulsory School Age

In England and Wales: a person is no longer of compulsory school age after the last Friday of June of the school year in which their 16th birthday occurs.

In Scotland: pupils whose 16th birthday falls between 1 March and 30 September may not leave before the 31 May of that year. Pupils aged 16 on or between 1 October and the last day of February may not leave until the start of the Christmas holidays in that school year.

In Northern Ireland: a person is no longer of compulsory school age after the 30th June of the school year in which their 16th birthday occurs.
Read the second part-

Workers’ Rights Under the National Minimum Wage