The national minimum wage rate is a legally-enforced standard that ensures employees are paid what they deserve. It was introduced in the UK in 1999, and today over 90 per cent of the world’s countries have some minimum wage laws in place. All sizes of company and almost all types of work are subject to this law, and any business found to be paying under the minimum wage could face severe repercussions. Here, Peninsula advises employers on the different minimum wage age bands, as well as providing information on the 2015 national minimum wage changes.
What is the UK minimum wage?
National minimum wage increases on a regular basis to keep income in line with inflation. The table below shows the current rates, in effect from October 2015.
|Age range||Current entitlement|
|25 and over (National Living Wage)||£7.20 per hour|
|21 and over||£6.95 per hour|
|18-20 year olds||£5.55 per hour|
|16 and 17 year olds||£4.00 per hour|
|Apprentices||£3.40 per hour|
National minimum wage applies to foreign workers, people who work from home, trainees, and agency workers. However, these figures do not apply for company directors, members of the armed forces, or self-employed people. Meanwhile, there are different sets of rules for apprenticeships and for agricultural workers. It’s certainly a complicated area, but one that is vital for employers to get right.
National Living Wage Introduction in April 2016
A new band was added to the National Minimum Wage, called the National Living Wage, in April 2016 which applies to workers aged 25 and over. The rate of the NLW is £7.20 an hour. It’s important not to confuse the NLW with the Living Wage. The fundamental difference is that the National Living Wage is a compulsory statutory requirement, whereas the Living Wage is a charity campaign and it is not legally enforceable.
As an employer it is vital that you keep up to date with these minimum wage changes. Peninsula can help ensure that your employees are being paid the correct amounts, saving your business from potentially expensive action should a pay issue be raised by one of your workers.