What is The Minimum Wage in the UK? A Complete Guide
Written by: Carin Vreede
Last updated: 13 February 2024
Table of contents
What is the minimum wage in the UK?
The minimum wage is a legal mandate that establishes the minimum hourly rate that employers must pay their workers. This fundamental principle ensures that workers receive fair compensation for their labor and contributes to a more equitable labor market.
Types of Minimum Wage
The UK adheres to two distinct minimum wage rates:
- National Living Wage (NLW): The NLW applies to workers aged 23 and over, setting the highest hourly rate. As of April 2024, the NLW stands at £10.42 per hour.
- National Minimum Wage (NMW): The NMW applies to workers under 23, with varying rates for different age groups.
As of April 2024, the NMW rates are as follows:
- NMW for workers aged 21 to 22: £10.18 per hour
- NMW for workers aged 18 to 20: £7.49 per hour
- NMW for workers under 18: £5.28 per hour
Current Minimum Wage Rates in UK 2023
|23 and over
|£10.42 per hour
|£10.18 per hour
|£7.49 per hour
|£5.28 per hour
Who is entitled to the minimum wage?
Scope of Employment
The minimum wage regulations apply to all workers employed under a contract of employment, regardless of their length of service, type of work, or whether they are paid on an hourly, daily, or piecemeal basis. This includes full-time, part-time, temporary, and casual workers.
Workers on zero-hour contracts are also entitled to the minimum wage for all hours worked, including any paid work or periods when they are on call.
Agency workers are entitled to the minimum wage for all hours worked for their client employer, including any periods where they are waiting for work or traveling to and from assignments.
Apprentices who are 19 or over and have completed the first year of their apprenticeship are entitled to the minimum wage for their age group. Apprentices under 19 are entitled to the NMW rate for their age group.
De facto Workers
Even if an individual is not formally employed under a contract, they may still be considered a worker if they perform work for an employer in a manner that demonstrates an intention to create a contract of employment. These individuals are also entitled to the minimum wage.
Night shift minimum wage
There is no separate minimum wage for night shifts in the UK. The National Living Wage and National Minimum Wage apply equally to all working hours, regardless of whether they fall during the day, night, or weekends.
However, it's important to note that:
- Some employers may offer additional compensation for night shifts due to the inconvenience and disruption to sleep patterns. This is not mandated by law, but it is a common practice in certain industries.
- While overtime pay rules are the same for day and night shifts, the night hours potentially contribute to more overtime pay if the shift extends beyond standard daytime working hours.
So, while there's no specific night shift premium built into the minimum wage, employees may still receive additional compensation from their employer.
How is the minimum wage enforced?
Role of the Low Pay Commission (LPC)
The Low Pay Commission (LPC) is an independent body responsible for advising the government on the appropriate level of the minimum wage. The LPC considers various factors, including the cost of living, productivity, and the impact on businesses and workers, when making its recommendations.
Employers have a legal obligation to ensure that they comply with the minimum wage regulations. This means that they must:
- Pay workers the correct minimum wage rate for their age group.
- Record all hours worked by their employees.
- Maintain accurate payroll records.
- Provide all employees with written information about their minimum wage rights.
Reporting Minimum Wage Violations
Employees who believe they are not being paid the minimum wage can report suspected violations to HM Revenue and Customs (HMRC). HMRC has enforcement powers to investigate claims and take action against employers who are found to have underpaid their workers.
Penalties for Non-Compliance
Employers who fail to pay the minimum wage can be subject to significant penalties, including:
- Backpay for all underpaid wages.
- Civil penalties of up to £20,000 per worker per offense.
- Criminal prosecution, which could result in fines of up to £10,000 per worker per offense.
HMRC encourages employers to review their payroll practices to ensure compliance with minimum wage regulations. The agency offers a range of resources and guidance to help employers understand their obligations.
Frequently Asked Questions
Yes, the minimum wage applies to overtime hours, which are any hours worked beyond an employee's normal working hours. Employers must pay the appropriate minimum wage rate for all overtime worked.
No, employers are generally not allowed to make deductions from employees' wages without their written consent. There are a few exceptions, such as deductions for income tax, National Insurance, and pension contributions. However, employers must ensure that all deductions are made in accordance with the law.
Apprentices are entitled to the minimum wage, but there are special rates for apprentices who are under 19. The minimum wage rate for apprentices under 19 is currently £4.81 per hour.
No, tips and gratuities are not considered part of the minimum wage and should not be used to offset the minimum wage payment. Employers must ensure that all workers are paid the minimum wage, even if they receive tips.
The National Living Wage is the higher rate of the minimum wage, which applies to workers aged 23 and over. The National Minimum Wage applies to workers under 23, with varying rates for different age groups.
A de facto worker is someone who performs work for an employer but is not formally employed under a contract of employment. De facto workers are still entitled to the minimum wage.
The minimum wage can only be temporarily reduced or waived in exceptional circumstances, such as when an employer is experiencing financial hardship or when a worker is engaged in certain types of voluntary work. This requires specific approval from the Low Pay Commission.
With years of experience in the HR field, Carin has a lot of experience with HR processes. As a content marketer, she translates this knowledge into engaging and informative content that helps companies optimize their HR processes and motivate and develop their employees.
Please note that the information on our website is intended for general informational purposes and not as binding advice. The information on our website cannot be considered a substitute for legal and binding advice for any specific situation. While we strive to provide up-to-date and accurate information, we do not guarantee the accuracy, completeness and timeliness of the information on our website for any purpose. We are not liable for any damage or loss arising from the use of the information on our website.
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