How do I ensure I’m paying the National Minimum Wage (NMW) correctly?

On the face of it, paying the NMW correctly appears simple, but it isn’t necessarily so!

The hourly rate for the minimum wage depends on age and whether the person is an apprentice. Your staff must be at least school leaving age to get the NMW; or aged 25 to get the National Living Wage (or NLW, a higher rate). The NMW will still apply for workers aged 24 and under. The Government publish the current rates here: https://www.gov.uk/national-minimum-wage-rates

The NLW shouldn’t be confused with the Living Wage suggested by The Living Wage Foundation, which has no statutory authority.

Common pitfalls in administering the NMW/NLW correctly include the following. Do take advice if you’re unsure:

• As well as employees, ‘workers’ are also entitled to the minimum wage. Do ensure that you regularly review employee and worker status in your organisation;
• Staff with duties that include some form of standby or on-call arrangements;
• Staff with irregular working patterns e.g. with significant seasonal variations;
• Deductions for uniforms;
• Mishandling overtime hours;
• Apprentices;
• Tips from customers;
• Salary Sacrifice schemes