How much do you know about the national minimum wage?

admin   June 10, 2014   Comments Off on How much do you know about the national minimum wage?

The penalties for non-compliance quadrupled in 2014, but many employers are still in the dark!

In this article we will answer the three questions we most commonly get asked about the national minimum wage:

1) What is it?

2) Who is and is not entitled to it?

3) What are the penalties for flouting the regulations?


1) What is the national minimum wage?

The national minimum wage is the minimum pay per hour that almost all workers are entitled to by law. It doesn’t matter how small an employer is, they still have to pay the minimum wage. The minimum wage rate depends on a worker’s age and whether they are an apprentice. The government website includes a handy calculator that allows employers and workers to check whether their pay meets the minimum wage requirements. See:   Full entitlement applies to workers aged 21 and over, while a lower minimum rate applies to 18 to 20 year-olds. Some 16 and 17-year-old workers also qualify for a minimum wage. The current national minimum wage rates for the period until 30th September 2014 are:

Age of employee 21 and over 18 to 20 Under 18 Apprentice*
2013 to 2014 £6.31 £5.03 £3.72 £2.68

*This rate is for apprentices under 19 or those in the first year of level 2 or 3 apprenticeships. All other apprentices are entitled to the appropriate rate for their age.   On October 1st 2014 the rates will increase to:

Age of employee 21 and over 18 to 20 Under 18 Apprentice*
2014 to 2015 £6.50 £5.13 3.79 2.73

2) Who is and is not entitled to the national minimum wage?

To qualify for the NMW, an employee or worker must be of school leaving age (last Friday in June of the school year in which they turn 16) or over. Contracts for payments below the minimum wage are not legally binding – the employee/worker is still entitled to the minimum wage.

We find that there is sometimes confusion as to whether certain types of employment which may be perceived as special cases are covered. In this context, it is important to understand that NMW legislation most certainly does apply to employees/workers who are part-time or casual; agency or homeworkers; and apprentices or trainees.

Who is not entitled to the minimum wage?

Employees/workers not entitled to the NMW include self-employed people and company directors; volunteers and those working on certain government and European programmes; family members living in the employer’s home; and non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and aren’t charged for meals or accommodation (for example au pairs).

Are people on work experience or internships entitled to the minimum wage?

A person engaged on work experience or an internship will not be entitled the NMW if they are:

  • a student doing work experience as part of a higher or further education course,
  • of compulsory school age,
  • a volunteer or doing voluntary work,
  • on a government or European programme,
  • work shadowing.

For more details, see:


3) What are the penalties for flouting the regulations?

The maximum fine for employers failing to pay the statutory rates increased from £5,000 to £20,000 on 1st February 2014. In addition, the HMRC announced that it would name and shame employers who do not comply. See for example this list of “underpayers” published in June 2014.

In 2013, the HMRC identified 736 employers who had failed to pay the national minimum wage, leading to the recovery of £3.9 million in unpaid wages for more than 26,500 workers.

The HMRC has listed some of the more outlandish excuses used by employers to explain why they have not paid the NMW. Five of our favourites are:

  • An employer said a woman on the premises was not entitled to NMW as she was his wife. When asked what his wife’s name was, the employer said “err… her name, err what’s your name love?”
  • An employer told HMRC: “I don’t think my workers know anything about the NMW because they don’t speak English.”
  • Another employer told HMRC: “When the NMW goes up I do increase the amount I pay a little, even if the total pay is still below the NMW. I don’t think it’s right to ignore the rises in NMW.”
  • An employer told HMRC: “It wasn’t a conscious decision to say ‘I’m not going to pay this’, but I’ve never really considered doing it because I’ve not had people come to me and say, ‘I’m not getting paid enough’ or ‘Is this the minimum wage?’”
  • An employee ran out of the premises when HMRC officers arrived to check for NMW infringements. The same employee then returned – minus the work pinafore – pretending to be a customer.


Contact me today if you need guidance on your responsibilities with regard to the NMW

If you’re confused about your precise obligations under the NMW legislation or simply want to make sure everything you are doing is legal and above board, contact me for a no-obligation discussion on 01865-771-933, or email: