Minimum Hassle for National Minimum Wage

The National Minimum Wage is set to rise next month. Refusal to pay it is a criminal offence and could result in a fine or even a prison sentence. To ensure you are up to date with the latest changes in the law, specialist HR adviser, Sue Isaacson from The HR Dept outlines all you need to do before 1st October 2008.

The National Minimum Wage applies to almost all workers. As an employer you have a legal duty to ensure it is enforced. If you fail to do so, you may be taken to tribunal by your staff. In addition, Her Majesty’s Revenue and Customs (HMRC), has the right to investigate you at any time and serve an enforcement notice to cover any underpayments. Deliberate refusal to pay could result in a prison sentence.

However, compliance is not as straightforward as simply ensuring that one figure is the bottom line for all of the wage packets that leave your business. Different rates apply to different ages. In addition, the number of hours you need to pay your workers the minimum wage is calculated according to the work they do.

To ensure that you are not breaking the law in October this year, your first step should be to check the age of all your employees.

  • Any staff aged under 18, who are no longer of compulsory school age should be paid a minimum of £3.53 an hour from October 1st.
  • Workers between the ages of 18 and 21 will be entitled to a minimum of £4.77 an hour.
  • All adults aged 22 and over should be paid at least £5.73 an hour.
  • If an employee has a birthday that takes their age to the next minimum wage threshold, remember to honour this in their pay packet.

Simply because someone works for you on a casual or part-time basis is no excuse for flouting the law. Workers eligible for the National Minimum Wage include home workers, part-time staff, casual workers, agency staff and anyone on a short-term contract. Exceptions include the self-employed, voluntary workers, apprentices and people employed in a Jobcentre Plus Work Trial.

In addition, some payments and expenses (such as loans, pension payments and overtime) are not regarded as part of the gross pay and are not calculated within the National Minimum Wage. If you supply accommodation to your workers, you may offset some of this, although from the 1st of October , there will be a limit on this of £31.22 a week.

For more information on how the HR Dept. Ltd can help you ‘Prevent People Problems’ and guide you through the maze of ever changing employment law; call 0845 078 8454 or email,

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