The national minimum wage sets minimum hourly rates that employers must pay their workers. It covers almost all workers in the UK. There are three aged based rates and an apprentice rate. This guide provides a basic overview of the national minimum wage and explains the role of HM Revenue & Customs (HMRC) in enforcing it.
The rules in this area can be complicated, so at various stages this guide also provides links to other sources of information. These will give you the greater detail needed to calculate national minimum wage requirements for individual workers.
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There are currently three aged based national minimum wage rates and an apprentice rate, which are usually updated in October each year. The rates that apply from 1 October 2013 are as follows:
Apprentices aged 19 or over who have completed one year of their apprenticeship are entitled to receive the national minimum wage rate applicable to their age.
See more information on the national minimum wage rates for earlier years on the GOV.UK website by following the link below
Almost all workers who work in the UK are entitled to the national minimum wage. But there are some groups who aren't entitled, including:
For a full list of all the exceptions, follow the link at the end of this section.
It makes no difference to a worker's entitlement to the national minimum wage whether they work for you full time or part time, or whether they are an agency worker, a temporary or casual worker, a piece worker or a home worker.
National minimum wage pay is calculated in a certain way. Many of the payments that you make to a worker will count towards their national minimum wage pay, but some won't. For example, a worker's basic pay (before deductions of tax and National Insurance) counts towards national minimum wage pay, but any payments for expenses do not count.
Every worker who's entitled to the national minimum wage must be paid at least their national minimum wage rate on average for every hour worked in each pay reference period (the pay reference period is the interval at which you pay them - such as weekly or monthly, but it cannot be longer than a calendar month).
This means that to work out how much you're required to pay a worker, you need to calculate how many hours they have worked. For national minimum wage purposes, there are four different types of work, and there are different rules for calculating the number of hours worked for each of these.
The four types of work are:
For full details of how the national minimum wage applies to each type of work, follow the links below
You must keep records that show you pay at least the national minimum wage to anyone who works for you and is entitled to it.
You must keep these records for at least three years, but it's a good idea to keep them for six years (five years in Scotland) in order to show that you have paid at least national minimum wage rates if a civil claim is brought against you.
HMRC compliance officers are entitled to ask you to produce your records for inspection.
If you realise you haven't paid a worker at least the national minimum wage requirement, then you must work out and pay the arrears to the worker.
Changes from 6 April 2009 mean that you must calculate any arrears using a formula that includes the current national minimum wage rate and you may end up paying more than you would have if you had paid the correct amount to start with.
HMRC enforces the national minimum wage. If HMRC finds you have underpaid the national minimum wage it will issue a notice of underpayment. This will show the arrears you must pay to your workers and the penalty you must pay to HMRC.
Details of how and where to appeal will be included with the notice of underpayment.
If you need more help and advice about paying the national minimum wage, you can contact the Pay and Work Rights Helpline.