According to the government the National Minimum Wage Act 1998 ‘provides essential protection for our lowest paid workers’. ACAS state that the National Minimum Wage (NMW) is the minimum pay per hour most workers are entitled to by law.
This framework is reviewed annually by the Low Pay Commission, with new rates set to take effect from 1 April 2019, so it’s important that business owners take those necessary steps now to comply with this updated legislation, says Bowcock & Pursaill Employment Specialist Clare Thomas.
New National Minimum Wage Rates From 1 April
- £8.21 per hour for ages 25 and over
- £7.70 per hour for ages 21 to 24
- £6.15 per hour for ages 18 to 20
- £4.35 per hour for school leaving age to 17
- £3.90 for apprentices*
*This rate only applies to apprentices aged under 19 or those 19 or over and in the first year of their apprenticeship. Apprentices aged over 19 in their second year must receive the NMW according to their age.
There are certain exemptions to the rates which include:
- Self-employed people
- Volunteers or voluntary workers
- Company directors
- Members of the Armed Forces
- Family members, or people who live in the family home of the employer who undertake household tasks
- Work experience students, depending on their placement length
All other workers including pieceworkers, home workers, agency workers, commission workers, part-time and casual workers must receive at least the NMW as a legal requirement.
Penalties for Employers
According to a government report in 2017/8 £15.6 million was identified in arrears for over 200,000 workers and £14 million issued in penalties to over 600 employers.
Clare explains: “The NMW is enforced by HM Revenue and Customs, which requires employers to pay at least the NMW and to keep records to show that they are doing so. Failure to do this is a criminal offence and HMRC can take employers to court for non-payment.”
She continues: “If an employer doesn’t pay the correct rate a worker can make a formal written complaint (or grievance) which, if unresolved internally, could lead to an Employment Tribunal. Alternatively, an employee can lodge a complaint directly to HMRC.
“Along with pay arrears, employers in breach of the law can face harsh penalties and can also be prosecuted under one of six criminal offences, which carry a maximum fine of up to £20,000. There is also scope for the government to “name and shame” those employers who do not pay NMW”
She concludes: “It does not matter how small the employer is, they still have to pay the minimum wage. All business owners should ensure compliance from the outset and conduct regular reviews to correct any errors which may have occurred.”
Bowcock & Pursaill can support employers with compliance in all aspects of NMW law. To find out how we can help contact Clare Thomas by calling 01782 200000 or via email at email@example.com.
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