For more information about the new Pay & Work Rights Helpline visit:
www.businesslink.gov.uk/payandworkrights
NATIONAL MINIMUM WAGE GETS BIGGER:
1st October 2009
The National Minimum Wage increases again on 1st October 2009, from this date the new rates will be......
22 yrs & above - £5.80 per hour (previously £5.73)
18 - 21 yr olds - £4.83 per hour (previously £4.77)
16 & 17 yr olds - £3.57 per hour (previously £3.53)
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NEW ENFORCEMENT PENALTIES FROM 6th APRIL 2009
On 6th April 2009 the law is changed to include automatic penalties and new ways of calculating minimum wage arrears for workers. Employers who are now caught not complying with the minimum wage will face a penalty of up to £5000 and have to pay the arrears of wages to their workers at the current minimum wage rate, regardless of when the underpayment actually occurred.
The vast majority of employers treat their workers fairly and have nothing to fear. These new changes will help decent employers by preventing them from being undercut by dishonest competitors.
To avoid paying a penalty, please put your business in order now. For confidential information and advice contact the helpline 0800 917 2368.
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What is the National Minimum Wage?
The National Minimum Wage is the minimum amount per hour that an employer can pay for any work undertaken by a worker. The rate of minimum wage depends on a workers age.
There are 3 age categories:
- Workers aged 22 and over
- 18 to 21 Year old workers
- 16 & 17 Year old workers
Rates of National Minimum Wage
| Age Band |
From 1st October 2009
|
| 22 years and over |
£5.80 per hour |
| 18 to 21 year olds |
£4.83 per hour |
| 16 & 17 year olds |
£3.57 per hour |
Increases in minimum wage rates:
The National Minimum Wage is continually reviewed and increased in line with economic conditions. Increases in minimum wage normally take effect annually on 1st October. If the rate is to be increased in October the Government normally make an announcement in the preceding March, to allow employers time to prepare for the increase.
The payment of National Minimum Wage is a statutory employment right. An employer is breaking the law if they fail to pay their staff the minimum wage.
Employer responsibilities:
- The minimum wage legislation is enforced by the HMRC and an employer must be able to prove that they are paying their staff the minimum wage, if requested.
- Employers must keep sufficient records to prove payment of the minimum wage.
- If a dispute arises the burden will be on the employer to prove that the minimum wage has been paid rather than on the worker to prove that it is not.
Employers not paying the minimum wage are required to bring all employees wages up to the minimum wage and pay arrears to which workers are entitled.
What about Apprentices and Trainees?
In order to encourage training and development:
- Most apprentices are exempt from the minimum wage until they reach the age of 19
- Apprentices who start with an employer after the age of 19 qualify for the minimum wage after 12 month exemption period
- For apprenticeship exemptions to apply an apprenticeship contract must be in place with appropriate training provided
- The helpline can provide information as to which apprentices and trainees are exempt and how long the exemption may apply.
What About “Benefits in Kind” / accommodation etc?
There are strict rules about benefits in kind and the minimum wage.
Some jobs provide benefits as well as payment in wages, such as free meals and accommodation or discounts off company products.
The only benefit that an employer can count against national minimum wage is accommodation.
There are special rules for calculating the value of your accommodation which counts towards the national minimum wage.
Currently the daily rate of the accommodation offset is £4.46 for each day that accommodation is provided (£31.22 per week).
What Doesn’t Count as National Minimum Wage?
A number of payments do not count toward national minimum wage, including:
- expenses
- deductions made for uniforms and tools
- overtime and shift premium
- redundancy payments
- retirement lump sums.
- From 1st October 2009, the use of tips, service charges, gratuities and cover charges can no longer be used to make up national minimum wage pay
Where can I get more information or advice?
The Pay & Work Rights Helpline offers advice and information about the minimum wage.
- All calls are treated in confidence.
- Lines are open 8am to 8pm Monday to Friday and 9am to 1pm on Saturday
- This is a freephone service
- Translation service available
Please contact the Pay & Work Rights Helpline on 0800 917 2368for further information and advice