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UK Minimum wage - the details

From April 1999, an employees wage is governed by the National Minimum Wage Act 1998. This is the lowest wage hourly, daily, weekly or monthly set by the Government that an employer must pay employees. Wages should be at or above the minimum wage. There is no opt-out from this. Workers have to be paid the minimum, even if a worker's performance is very poor.

Adults who work legally in the UK are required to get the National minimum wage. From October 2007, there was a change to the minimum wage.
  • £5.52 per hour for workers aged 22 years and older.
  • £4.60 per hour for workers aged 18-21
  • £3.40 per hour for young people (older than school leavers age and younger than 18)

What is included in the minimum wage calculation?

The minimum wage is calculated by working out your gross pay (before tax). If you receive any commission or bonuses, this would be included in the pay. Any tips awarded to the employee do not count in the calculation, unless the employer collects them and pays them through the PAYE system. If an employer provides free accommodation, this can be included, but only up to the value of £30.10

Who can receive the minimum wage?

The minimum wage can be set by any employer for any job, but a contract of employment has to be signed by both employer and employee. You should receive the minimum wage if you are:
  • A full time or part-time worker
  • A home worker
  • A casual worker
  • Short term contract worker
  • Freelance or agency worker
  • Pieceworker.
  • Workers aged 16 and 17 (except apprentices)

Who is not entitled to the minimum wage?

The following groups are not entitled to the minimum wage, and these are:
  • Fishermen
  • Prisoners
  • Mariners and offshore workers
  • Au pairs
  • Voluntary workers
  • Some apprentices
  • Armed Services worker
There are some industries and organisations that set their own minimum wage by way of collective agreement. This is an agreement between the employer and Trade Unions. An employer has a legal obligation to keep records of all employees, and if a worker suspects that less than the minimum wage is being awarded, he can request to see copies of his records kept by the employer. In cases of dispute, the employer would have to prove that the minimum wage is being paid.


Deminos are HR Outsourcing and employment law specialists. To find out more please call us on 020 7870 1090 or visit http://www.deminos.co.uk