Articles Minimum Wage A Guide To The National Minimum Wage

A Guide To The National Minimum Wage

Are you paying your workers enough? Every employer needs to know about the National Minimum Wage. This threshold is part of a government strategy to make sure that workers can count on having a minimum pay rate for the work that they do. The rates are recommended by the Low Pay Commission, which has been operating since 1999, and have risen every year. For employers, it's important to know what the rate is and who is entitled to it.

As an employer, it's safe to assume that most of your workers are entitled to the National Minimum Wage. Whether your employees are full time or part time, whether they work in your offices or off-site, they are all entitled to this basic rate of pay. According to the government's guidance, only a few categories of workers are not entitled to this minimum hourly rate. Au pairs, some apprentices, those under school leaving age, voluntary workers, armed forces workers and self employed people do not qualify for the minimum wage. Everyone else does.

Minimum Wage Bands

However, it's still not completely straightforward. There are three bands for the minimum wage, which apply to workers of different ages. Most workers (including those who are employed through an agency, work part time, work on a contract, do piece work or do casual work) get the adult rate of £5.52 an hour if they are over the age of 22. The next band is the development rate, which applies mainly to workers aged 18 to 21. This rate is £4.60 per hour. Workers over 22 who are receiving accredited training and are in the first six months of a new job may also receive this rate. Young people aged 16 to 17 receive a rate of £3.40 an hour.

These rates are reviewed by the Low Pay Commission every year, with increases applied in October. The rates to be applied from October 2008 are an adult rate of £5.73 an hour, a development rate of £4.77 an hour, and a school leavers' rate of £3.53 an hour. As employers, it's important to keep abreast of changes in these rates, and that's where using an HR specialist can help. That means that you outsource the worry while keeping your employees happy. In general the Low Pay Commission feels that the country's lowest paid workers have benefited from the National Minimum Wage, and it's pushing for the extension of the adult rate to 21 year old workers.

Deminos are HR Outsourcing and employment law specialists. To find out more please call us on 0191 460 1111 or visit http://www.deminos.co.uk

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