Minimum Wage

What is the National Minimum Wage?

The National Minimum Wage applies throughout the United Kingdom and is due to increase in October 2008.

16 and 17 year olds rate

Who will be exempt from the National Minimum Wage?

The National Minimum Wage does not apply to

Are there any exemptions for small businesses?

There are no exemptions because of the size of business, or because of the sector, job or region.

What counts as pay?

As well as a worker's basic pay, there are other elements of pay which may count towards the National Minimum Wage hourly rate. These include incentives such as merit or performance-related pay, and bonuses.

Extra money above basic pay (for example, overtime or shift work premiums) do not count. Regional allowances which are not included in an employee's basic pay do not count.

All benefits in kind (benefits other than money), except accommodation, do not count. The accommodation benefit will increase from its its present hourly rate of £4.30 to £4.46 a day.

What counts as hours?

The number of hours for which workers must be paid the National Minimum Wage is worked out according to the type of work they do. There are four different types of work.

What rights do workers have?

Workers have a right to:

Sacking a worker because they become eligible for the National Minimum Wage, or a higher rate, counts as unfair dismissal. Workers do not have to work for a qualifying period to be protected against this type of unfair dismissal.

Who enforces the National Minimum Wage?

The Inland Revenue enforces the National Minimum Wage. In the agricultural sector, agricultural inspectors are enforcing both the National Minimum Wage and the agricultural minimum wage.

What are the penalties for not paying the National Minimum Wage?

It is a criminal offence to

National Minimum Wage officers can issue an enforcement notice if they find that you have underpaid your workers.

This may be followed by a penalty notice. Officers will give you every chance to pay your workers the National Minimum Wage before they give you a penalty notice. From January 2007 new measures came into force to back the minimum wage with tougher enforcement. These include:

The government also announced tough new penalties against rouge employers who underpay workers by increasing spending on enforcing the minimum wage.

Where can I get more information on the National Minimum Wage?

You can get more information and the following free publications by phoning the National Minimum Wage helpline on Tel 0845 600 0678 (local rates apply):

If you work in the agricultural sector, you can get more information by phoning 0845 000 0134 (England and Wales)

THIS DOCUMENT BASED UPON CROWN COPYRIGHT © 2007