The importance of paying minimum wage

  • Pay & Benefits
Peninsula Logo

Peninsula Group, HR and Health & Safety Experts

(Last updated )

Read our article: 'The importance of paying minimum wage'. Contact us today for more information about our Employment Law, Health & Safety, and HR services.

Following recent news stories of companies, including large organisations such as H&M and Welcome Break, breaching the National Minimum Wage Regulations 1999 the spotlight has again been focused on the importance of paying minimum wage.

The National Minimum Wage (NMW) is the minimum amount employers can pay workers dependent on their age and status, for example, the apprentice rate applies to apprentices under 19 or 19 and over but in their first year of apprenticeship. There are certain exceptions to this rule, such as voluntary work, a family member of the employer living in the employer’s home and work placements as part of higher and further education.

The importance of paying minimum wage is, not only that it is a criminal offence for employers to pay below NMW, but also it is a highly sensitive area which is subject to government scrutiny due to the issue of exploitation of employees. The government is keen to crack-down on employers not paying the NMW and they have taken steps to penalise employers. Changes to penalties for employers not paying NMW increased in 2014 meaning that employers will face a financial penalty of 100% of the unpaid wages, subject to a maximum of £20,000, as well as making good the underpayment to the employees. Plans have also been announced to increase this penalty to £20,000 per worker, where underpayments of more than £20,000 apply to each such worker.

As seen in the press, the government initiative of ‘naming and shaming’ firms who fail to pay NMW is working to publicise the importance of paying minimum wage. The government is getting tougher on those employers who don’t and the consequences of being named as an offender may lead to problems in recruiting, retaining and engaging staff.

The current minimum wage rates are:

Age 21 and over: £6.50 per hour

Age 18 – 20: £5.13 per hour

Over compulsory school age but not yet 18: £3.79 per hour

Apprentice rate (apprentices who are under 19; or 19 or over but in the 1st year of apprenticeship): £2.73 per hour.

If you need any clarification on this issue then contact the Peninsula Advice Service on 0844 892 2772.

FAQs

Got a question? Check whether we’ve already answered it for you…

Related articles

  • paternity leave act passed

    Blog

    Paternity Leave (Bereavement) Act 2024 passed before Parliament went into recess

    The sudden announcement of a general election to be held on 4 July left only a few days before Parliament closed down and gave the Government the problem of which items of legislation to quickly push through the adoption process.

    Peninsula TeamPeninsula Team
    • Employment Contract
  • potential tax rise

    Blog

    Sunak's £2k tax rise jibe 'absolute garbage' says Starmer

    Taxes were on the agenda for the Prime Minister as he repeated ‘I don’t want to raise your taxes to pay for that’ at the first TV debate as he accused Starmer of targeting wealthy to fund Labour policies

    Peninsula TeamPeninsula Team
    • Pay & Benefits
  • labour updated manifesto

    Blog

    Labour releases updated manifesto

    Ahead of the General Election on Thursday 4 July 2024, the Labour Party has released an updated manifesto, ‘Labour’s plan to make work pay – delivering a new deal for working people’.

    Peninsula TeamPeninsula Team
    • HR Policies Documentation
Back to resource hub

Try Brainbox for free today

When AI meets 40 years of Peninsula expertise... you get instant, expert answers to your HR and Health & Safety questions

Sign up to our newsletter

Get the latest news & tips that matter most to your business in our monthly newsletter.