The National Minimum Wage explained

The National Minimum Wage (NMW) is aimed at providing employees with decent minimum standards and fairness in the workplace. It sets hourly rates below which pay cannot fall. The minimum wage is a legal right - different rates apply to different groups of people. Part-time workers, casual labourers, agency workers and homeworkers are all entitled to be paid the NMW. Follow our three-step guide to the National Minimum Wage.

  • What the rates are
  • Exemptions
  • Keeping records

What the rates are

The main adult rate, which applies to workers aged 22 or over, is currently £6.19 an hour, for 18-21 year-olds, it is £4.98 an hour. There is a development rate for 16-17 year-olds, which is £3.68 an hour. The number of hours for which workers must be paid NMW depends on the type of work. Time work is where you set the number of hours; salaried-hours work is a set number of basis hours; output work is where employees are paid purely according to productivity and unmeasured work is where there are no set hours or measures of workers' output.

  • Check carefully what rates apply to your employees
  • Assess the kind of work they will be doing and what NMW they are entitled to

Exemptions

Almost everyone working legally in the UK is entitled to NMW, but there are a few exemptions that apply. These include voluntary workers, apprentices who are under the age of 19 or those aged 19 and over who are in their first year of apprenticeship. Students on a work placement of less than one year that forms part of their course and those workers who are based permanently outside the UK are also exempt.

  • Check whether NMW applies, as some working people are exempt
  • Voluntary workers and some students are not covered by the NMW rules

Keeping records

You are legally required to keep records showing you are complying with NMW regulations otherwise you could face a fine. If your workers' earnings are clearly above the minimum wage, or if you already keep detailed records of pay and hours worked, you will not have to keep records applying to NMW.

  • By law, you must have records indicating compliance with NMW requirements
  • Your records will be used in the event of any dispute between yourself and employees

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