Changes to the Minimum Wage in the UK

As of today, the National Minimum Wage has increased- do you know if you are paying your staff the right amount?

The rates are based on the recommendations of the independent Low Pay Commission and are changed in October every year.

The National Minimum Wage applies to nearly all workers & employees. The worker's pay must not fall below these hourly minimum rates.

New Rates as of 1st October 2009

• £5.80 an hour for workers aged 22 and over (up from £5.73)

• £4.83 an hour for 18-21 year olds (up from £4.77)

• £3.57 an hour for 16-17 year olds (up from £3.53)

Who can get the minimum wage?

Most adult workers who:

• Are working legally in the UK

• Are not genuinely self-employed

• Have a written, oral or implied contract

Special rules apply to apprentices.

The National Minimum Wage does not apply to apprentices under the age of 19.

There is no National Minimum Wage for the first 12 months of the apprenticeship for apprentices aged 19 or over. After 12 months, the minimum wage should apply according to their age.

Under the Employment Act 2008, employers face a penalty if HM Revenue & Customs discover they have failed to pay the National Minimum Wage.

The penalty is set at 50% of the total underpayment (for periods starting on or after 6 April 2009). The minimum penalty is £100 and can rise to a maximum penalty of £5,000.

Employers who comply fully within 14 days of service of a ‘notice of underpayment’ will receive a discount on the penalty of 50%.

In addition, underpaid workers will be entitled to have arrears of wages repaid the current rate.