From Wednesday, October 1, the rates of National Minimum Wage (NMW) are increasing. Revised rates are: workers aged 22 or over £5.73 per hour, workers aged 18-21 £4.77 per hour and workers aged 16 and 17 over compulsory school age £3.53 per hour.
With a few exceptions most workers are entitled to receive a minimum hourly rate, some exclusions include, teenagers who have not reached compulsory school-leaving age, the self employed and workers who live and work within the family home and or business, including au pairs and nannies.
Special rules also apply to apprentices who may be exempt from minimum wage until their 19th birthday. Agricultural workers are entitled to an agricultural minimum wage which differs in rates and is dependant on age, grade and job. Details can be obtained from DARD at 028 9052 0813.
National Minimum Wage is expressed as an hourly minimum rate of pay. A worker does not have to be paid the minimum wage for each hour worked, but must be paid the minimum wage for each hour worked in their pay reference period. A pay reference period is determined by when a worker is paid — daily, weekly, etc. The maximum a pay reference period can extend is one calendar month.
When checking whether a worker's pay is in line with the NMW, the worker's pay must be calculated in a particular way.
Some elements of a worker’s pay are included while others are excluded. Elements of pay counting for minimum wage purposes are limited but include gross pay and performance related incentives such as bonuses and tips where paid through the payroll and subject to tax and national insurance. Benefits in kind will not count as part of a worker’s wage except when accommodation is provided by the employer to the worker.
Some elements of workers’ pay including some deductions will not count for minimum wage purposes. These include, an advance of wages, overtime and shift premium, staff rewards, expenses and some non-consolidated special allowances such as hygiene payments, attendance payments or for working unsocial hours or in dangerous conditions.
Deductions from a worker’s wages to account for provision of a uniform or to meet any business expense is not permissible if it brings that worker’s hourly rate below the minimum wage.
Full details on payments and deductions which count towards or are excluded from minimum wage pay can be obtained from the NMW Helpline 0845 6500 207.
Entitlement to the NMW is enforced by HMRC compliance officers who will visit employers to ensure their workers receive the minimum hourly rates. To establish that a worker has received the minimum wage, all employers are required to maintain for at least three years sufficient records to prove a worker’s hourly rate. Such records will include personnel details for the worker, a record of hours worked and confirmation of wages paid.
Further information on all aspects of the NMW is available from your local CAB or from the NMW Helpline for Northern Ireland on 0845 650 0207.
The helpline, which has been in operation since 2001, is a partnership with the HMRC National Minimum Wage Compliance Unit and has helped identify over £2.7m of arrears for underpaid workers in Northern Ireland to date.
Siobhan Harding is an Information and Policy Officer with Citizens Advice