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Posted on September 12, 2014 by Stipendia Office

Almost everyone who legally works in the UK must get a minimum pay, which has been labelled as the National Minimum wage. This minimum level of pay has been rising every year and is due to rise again in October 2014, literally a matter of weeks away. As this is quite an important matter for companies, we’ve decided to put together this ‘All you need to know’ post about the National Minimum Wage.

Who is entitled to the minimum wage?

The national minimum wage applies to most workers over the compulsory school age working in the UK. This includes:

•  Workers over the compulsory school age
• Overseas workers even if they are only in the UK for a short time
• Agency workers and homeworkers
• Some mariners (sailors)
• Agricultural workers (who may be entitled to more than the national minimum wage under the agricultural minimum wage)
• Crown (government) employees
• Staff of the House of Commons and House of Lords

The national minimum wage does not apply to:

•  The self-employed, office holders, directors (unless they also have a workers’ or employment contract)
• The armed forces
• Share fishermen
• Voluntary workers (but only when specific circumstances apply)
• Prisoners working under prison rules
• School children below school leaving age

Additionally, the rate of the wage depends on what age group you are a part of; see the table below for a breakdown of the current rates:

The Apprentice wage is defined as an apprentice aged 16-18 or those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum wage for their age.

Tips on ensuring you are paying the correct amount of National Minimum wage

It is extremely beneficial in making sure you’re paying the correct amount. Employers who fail to pay their workers the correct amount can face a penalty of up to £20,000 per employee and may even be prosecuted. Here are some tips:

• Check what rates you should be paying to each worker as there are different rates for different types of workers.
• Have a conversation with your employee to ensure you have the correct details (e.g. check their birthdays, and whether they are an apprentice).
• Keep a record of the number of hours worked by each worker, such as a timesheet system, to make sure you are paying them for the correct number of hours per week/ month.
• Keep your payroll updated for each employee to ensure you are paying the correct amount.

Those are the basic all you need to know facts about the National Minimum wage. The rate has changed annually since 2005 and has risen every year, but nevertheless, it’s worth making sure you’re prepared for the change.