All eligible workers in the UK are entitled to a minimum level wage for every hour that they work. This includes all employees but extends considerably further, including to casual workers and agency workers. The principal excluded categories are the genuinely self-employed, company directors and volunteers and voluntary workers who do not receive any payment other than genuine expenses.
National Living Wage (NLW) is £7.83 per hour from 1st April 2018, for all workers aged 25 and over, except for those in the first year of an apprenticeship.
National Minimum Wage (NMW) from 1st April 2018 will be:
- £7.38 for workers from the ages of 21-24
- £5.90 for workers from the ages of 18-20
- £4.20 between school leaving age and 18
- £3.70 for apprentices under the age of 19, or in the first year of an apprenticeship
Workers must be paid the applicable minimum rate for each hour that they work. The rate applies to a worker’s gross pay, inclusive of allowances that are consolidated into the rate of pay. Allowances that are not consolidated into a worker’s pay, such as London Weighting, shift premia, overtime payments and antisocial hours payments cannot be taken into account in calculating whether a worker has received the appropriate minimum rate.
If a worker is provided with accommodation as part of their employment this can be taken into account for NMW/NLW purposes only to a maximum of £7 a day or £49 a week.
Work for which Minimum Wage must be paid
There are particular rules governing payments to workers who are paid based on their output, and who do work that cannot be measured on a time basis (“unmeasured work”). Travel in the course of work counts as time for which the minimum rate must be paid, as does time spent attending work-related training.
One highly problematic area from a minimum wage perspective has been workers who are “on call”, in particular workers who do sleeping night shifts. There has been a lot of conflicting case law over the years on this topic. The latest position following the Court of Appeal’s judgment in the Royal Mencap Society case is that provided such workers are expected to sleep during their shifts they should be considered to be “available for work” rather than “working”. In such circumstances the workers would only entitled to the NMW/NLW when they are awake and actually performing duties. Inevitably each case of this kind will turn on its own facts and an appeal against the Court of Appeal’s judgment has been submitted to the Supreme Court on behalf of the claimants.
It should not be assumed that circumstances in which a worker will be considered to be working for the purposes of the Working Time Regulations (WTR) will necessarily mean that they are eligible for minimum wage. A more inclusive approach to the concept of working is taken under the WTR, which is derived from European legislation than under the UK’s minimum wage law.
A worker who has not been paid NMW/NLW may bring a claim in the Employment Tribunal within 3 months of the last non-payment of NMW/NLW. Their claim may only be back-dated for up to 2 years of back-payments however. Minimum wage enforcement is also carried out by HMRC and financial penalties may be applied to employers who have not complied with their NMW/NLW obligations.
This page was updated on the 14th November 2018
Posted on 02/04/2018 in Legal UpdatesBack to Knowledge