The National Minimum Wage - Payroll Information from Michael Harwood & Co

Employers are obliged to pay their workers a minimum hourly rate of pay, known as the National Minimum Wage (NMW). The rate of the National Minimum Wage is defined by law, and applies to most workers in the UK over school leaving age, with certain exceptions, including:

  • Directors of companies who do not have an employment contract
  • Voluntary workers
  • Self-employed individuals
  • Children of compulsory school age
  • Family members of the employer living in the employer's home

Separate rates of pay apply to agricultural workers.

The National Minimum Wage's rate is reviewed on an annual basis, with the updated rates published each October. There are different rates of National Minimum Wage applying to different groups of workers, which are:

  • The main rate for workers aged 21 and over
  • The 18-20 year old rate
  • The 16-17 year old rate
  • The apprentice rate for apprentices under 19, or in the first year of their apprenticeship

Although the rules are complex, as a general guide benefits in kind, expenses, certain allowances and most deductions are not included when calculating NMW. Job-related training time and travelling is included in the calculation, but periods of absence,  holiday, rest breaks or industrial action are not.

For workers who are not paid according to the number of hours they are at work, special rules apply.

Employers are required to keep records to demonstrate payment of the NMW. All records must be kept for three years.

Any qualifying individuals whose employers fail to pay them the National Minimum Wage may apply to a court or tribunal, and they will be protected against any loss suffered. If an employer fails to pay the NMW they may be liable to financial penalties and convicted of a criminal offence.

We can advise you on the latest NMW rates. For expert assistance with your payroll needs in Leamington Spa, contact Michael Harwood & Co today.