What is a ‘Minimum wage’?

The minimum wage also referred to as the ‘National Living wage’ in the UK was introduced in 1998. It is a law that recommends and enforces a minimum salary of payout per hour for a worker. As of 2019, the minimum wage for workers in the UK stood at £8.21 per hour.

Who is entitled to a minimum wage?

Workers above the age of 25 are entitled to a minimum wage. To enumerate, there are certain types of occupation which are not entitled. For example, apprentices under 19, self-employed people, voluntary workers, etc. The complete list is found here.

For workers below 25, the following hourly rates as minimum wage apply.

  • 21 to 24 years – £7.70 / hour
  • 18 to 20 years – £6.15 / hour
  • Apprentice – £3.90 / hour

Can employers pay less than the minimum wage?

It is a criminal offense. Important to realize, that such a law is implemented to protect employees. Attempting to fake payment records or paying less is an offense.

The point often overlooked is the payment period. Technically, it is referred to as the ‘pay reference period’. Employers need to ensure that the pay reference period is not more than 31 days.

How is employee disputes over national living wage handled?

The HM Revenue and Customs (HMRC) is authorized to handle such disputes. Workers can raise complaints with the HMRC. At any given time, HMRC officers will have the right to investigate wage payments from employers. Employers are mandated to save employee payroll records for a minimum of 3 years.

Thus, payroll records become a means of proof for the employers to showcase to HMRC. If the HMRC finds the employer is not paying the right wage to workers, they can enforce legal action against the employer.

How to calculate the national minimum wage?

The government of the UK has an online calculator to help employees calculate their wages. All things considered, employers can protect the employee’s interests by investing in payroll software.

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