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A Guide to Minimum Wage and What to Do if an Employer Isn’t Paying It

Employers have an obligation to pay their employees the correct National Minimum Wage or above. It is a criminal offence for employers to not pay somebody the National Minimum Wage, and employers who discover that they have paid an employee below this amount must immediately rectify the situation by paying any arrears.

Who Gets the Minimum Wage?

People who are classed as workers or employees and at least school-leaving age are entitled to the National Minimum Wage. Any workplace contracts that are for payments below this amount are not legally binding. Part-time workers, agency workers, casual labourers, trainees, apprentices, and foreign workers are also entitled to the correct minimum wage. The National Minimum Wage should also be paid to workers that are paid by the number of items that they make, agricultural workers, offshore workers, seafarers, and disabled workers.

Who is Not Entitled to the National Minimum Wage?

Some people are not entitled to receive the National Minimum Wage. These include:

  • People who are self-employed as a freelancer or running their own business
  • Company directors
  • Members of the armed forces
  • Voluntary workers
  • People working on a government employment programme
  • People who live and work in their employer’s home such as au pairs
  • Workers below school leaving age
  • Students on a work placement for up to one year
  • People shadowing employees at work
  • People working on a Jobcentre Plus Work trial
  • Prisoners
  • People living and working within religious communities
  • Share fishermen

How is the National Minimum Wage Calculated?

The minimum wage that an employee is entitled to will depend on the nature of the work, for example, if they are an employee or an apprentice, and their age. The National Minimum wage refers to the minimum pay per hour that almost all employees are entitled to. No matter the size of the business, any company that employs staff needs to pay the minimum wage or higher.

Employees and employers can calculate the minimum wage and check that the right minimum wage is being paid, using tools on the Gov.uk website. There are separate calculators for workers to check that they are getting the correct minimum wage and for employers to check that they are paying the right amount.

How Much is the National Minimum Wage?

The National Minimum Wage is currently £8.91 per hour. People under the age of 23 are entitled to a lower minimum wage. Apprentices also have a lower minimum wage, at £4.30 per hour. This is the minimum that employers are required to pay their employees. New rates for the National Minimum Wage are expected to be introduced in April 2022.

What is the Minimum Wage for a 16 Year Old?

Sixteen and seventeen year olds are entitled to earn a minimum of £4.62 per hour when working full-time or part-time. However, workers of this age who are working in an apprenticeship role, rather than employment, will be entitled to earn a minimum of £4.30 per hour.

What is the Minimum Wage for a 17 Year Old?

Seventeen year olds are entitled to a minimum wage of £4.62 per hour from April 2021, unless they are an apprentice, in which case the National Minimum Wage for apprentices is lower.

What is the Minimum Wage for an 18 Year Old?

The National Minimum Wage rises once a person reaches the age of eighteen. At ages 18-20, employees are entitled to a minimum wage of £6.56 per hour. However, age does not make a difference to apprenticeship rates, so bear in mind that an 18 year old who is working in an apprenticeship role will only be entitled to earn £4.30 per hour, although some employers do pay more in line with the minimum wage requirements for the age of the worker. However, this is not a legal requirement and is down to the discretion of the individual employer. At nineteen and after the first year of the apprenticeship is completed, an apprentice will be entitled to the National Minimum Wage for their age group.

How the National Minimum Wage Works for Apprentices

Apprentices are entitled to the apprentice minimum age rate if they are either aged under 19 or are in the first year of their apprenticeship at any age. An apprentice will become entitled to the National Minimum Wage for their age group if they are aged nineteen or over and have completed the first year of their apprenticeship.

What to Do If Your Employer Has Underpaid You

If you have been paid less than the National Minimum Wage, your employer is obliged to pay any arrears that they owe you. The first step in this situation is to go to your employer to try and get the issue resolved. You can do this even if you no longer work for the company. Most of the time, you will find that not being paid the correct minimum wage is an error that many employers are willing to correct quickly and easily, since failing to pay the correct minimum wage is a criminal offence.

If you are unable to resolve the issue by going directly to your employer or former employer, you have two options to consider. You can either report your employer to HM Revenue & Customs (HMRC) who will start an investigation or make a claim to an employment tribunal to get your lost earnings back from your employer. Bear in mind that you cannot do both of these at the same time.

Resolving the Issue Directly

Raising the issue directly with your employer is usually the best option if you have been paid less than the minimum wage. If there has been an error in your payment, sometimes, an informal conversation can be the easiest way to resolve it. You may be able to speed up the resolution of the issue by bringing a copy of calculations of the National Minimum Wage from Gov.uk to show how much you should have been paid, and a copy of your payslip.

If you cannot resolve the issue informally, the next step is to make a formal complaint to your employer. You can also contact the Acas helpline to get support and more information on the options that are available to you. Bear in mind that Acas are unable to provide legal advice.

Reporting to HMRC

You can make a complaint to HMRC if you have not been paid the right minimum wage. You can report your employer anonymously. If the investigation find that your employer has not paid you the National Minimum Wage, they can do a number of things. These include:

  • Issuing a notice to your employer to pay any money that you are owed, going back for a maximum of six years
  • Fine your employer for not paying the right minimum wage
  • Take your employer to court

Making a Claim to an Employment Tribunal

If you have not been paid the correct minimum wage, another option to consider is making a claim to an employment tribunal. The type of claim that you make will determine the amount of money that you can claim. For example, a claim for unlawful deduction of wages allows you to make a claim to get back any money owed going back for no longer than two years. You will need to start your claim within three months of the most recent underpayment or deduction. You will need to inform Acas first before you make a claim to an employment tribunal. You will also have the option of early conciliation, which is designed to help you resolve the issue with your employer before making a claim. You do not need to pay a fee to make a claim to an employment tribunal.

When Will National Minimum Wage Increases Be Paid?

There are some instances when workers or employees will be entitled to a higher rate of the National Minimum wage. These include if the government increases the National Minimum Wage, which usually occurs in April each year, or when an employee turns eighteen, twenty-one or twenty-three. In these instances, the higher rate will be applied from the next pay reference period after the increase, which could mean that your pay may not be increased immediately. The pay reference period refers to the period of time that the pay covered. For example, the pay reference period is one month for somebody who is paid monthly.

What is the National Living Wage?

The National Living wage was previously for those aged 25 and over, but it has been extended to younger employees aged 23 and over. The National Living Wage is the highest rate of the National Minimum wage and is currently at £8.91 per hour. It was £8.72 per hour last year.

The National Minimum Wage is in place to protect employees from underpayment, and all employers regardless of the business size are legally obliged to pay employees the correct minimum wage or higher. You can use the gov.uk website to calculate the minimum wage that you are entitled to for your age and the work that you do.

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