Belfast Telegraph

Friday 22 August 2014

The National Minimum Wage increases

The National Minimum Wage (NMW) increased again from 1 October 2010. All workers are entitled to the NMW including casual workers, part-time workers, workers on short-term contracts and workers employed by sub-contractors, agency workers and homeworkers regardless of how long they have worked for the employer.

The National Minimum Wage (NMW) increased again from 1 October 2010. All workers are entitled to the NMW including casual workers, part-time workers, workers on short-term contracts and workers employed by sub-contractors, agency workers and homeworkers regardless of how long they have worked for the employer. Agricultural workers are already entitled to an agricultural minimum wage. Where the NMW is lower than the agricultural minimum wage, the higher rate will apply.

The increases continue to be small due to the current economic climate. From 1 October 2010 the NMW rate for 16 and 17 year olds increased to £3.64 per hour, the rate for 18-20 year olds is £4.92 per hour and the rate for those aged 21 and over is £5.93 per hour. It is important to note that from 1 October following a Low Pay Commission recommendation the adult rate of the minimum wage has been extended to include 21-year-olds.

Another important change from 1 October is the introduction of an apprentice rate of NMW. From this date an apprentice who is aged under 19 will be entitled to the new rate. An apprentice who is aged 19 or over in the first year of their apprenticeship will also be entitled to the new apprentice rate of NMW but after that they will be entitled to the normal rate of minimum wage for their age. The apprentice rate of NMW is £2.50 per hour. A person will be treated as an apprentice if they are a worker who has a contract of apprenticeship which includes someone with a traditional contract of apprenticeship or they are a worker and are taking part in a particular Government training scheme. In Northern Ireland this includes ApprenticeshipsNI or Modern Apprenticeships.

Under legislation employers must keep sufficient records relating to all workers who qualify for the NMW in order to be able to prove that they are receiving at least the NMW. Guidance states that records must be kept for at least three years, although employers are advised to keep records going back six years because arrears of minimum wage can be awarded to workers for up to six years even after the worker has left the business. The NMW Regulations do not state what counts as sufficient records but guidance says that the definition will vary from one employer to another and from one worker to another. Employers should be aware that, should an NMW investigation take place within the workplace that to the burden of proof will be on the employer to show that the NMW has been paid to that worker. The employer will need sufficient records to provide this proof.

If a worker believes that they may be being paid less than the NMW they can make either an anonymous or a named complaint to the HMRC National Minimum Wage Compliance team. Employers who are found to not have paid the minimum wage will be ordered to pay workers arrears at the current rate of minimum wage and not at the rate which would have been applicable whenever the breach occurred. In addition employers will also have to pay a fine of 50% of the total arrears bill to the HMRC. Employers who fail to pay arrears of wages identified or fines due or who hinder or obstruct an HMRC investigation may be subject to criminal proceedings.

For more information on the NMW contact your local CAB. Further help on all aspects of the NMW for both employers and employees is available, in confidence, from the Pay & Work Rights Helpline on 0800 917 2368.

Siobhan Harding is an Information and Policy Officer with Citizens Advice

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