The National Minimum Wage Act 1998 sets out the entitlement to a minimum rate of pay for various persons and the National Minimum Wage Regulations 1999 followed this, specifying the first rates in April 1999,
The NMW has consistently been reviewed each year with advice from the Low Pay Commission. New rates generally take effect from October each year. From 1st October 2012, the following rates will apply:
•The rate for 18 – 20 year olds will not change – remaining at £4.98 an hour;
•The rate for 16 – 17 year olds will not change – remaining at £3.68 an hour;
•The rate for apprentices will increase by 5p to £2.65 an hour.
As part of the NMW, it has been announced that the maximum accommodation offset will increase by 9p to £4.82 per day.
When looking at the 16 – 17 year old bracket, this should really say “over compulsory school leaving age but not yet 18” because it may include some 15 year olds and exclude some 16 year olds.
The NMW is not a right that is only restricted to employees. The employer is obliged to pay the NMW to each of his/her workers except those that are excluded by the Act. This means that Agencyworkers, Homeworkers, Piece workers, Commission workers, some seafarers, some offshore workers, some workers working outside the UK and some company directors may all be eligible for the NMW. Apprentices who are 19 or over and not in their first year of employment must receive the NMW at the appropriate age related rate.
Some agricultural workers are entitled to higher rates of pay than those set under the NMW Act, however these are determined by the Agricultural Wages Board.
Finally, not all pay counts for the calculation of the NMW. For example, tips and gratuities do not count whereas incentive bonuses and deductions for accommodation at or below the accommodation offset limit will count.
For any further clarification, please call our 24 Hour Advice Service on 0844 892 2772.