Minimum Wage Increase

As of 1st October 2014, the national minimum wage will increase as follows:

Over 21 – £6.50 (2013 – £6.31)

18 to 20 – £5.13 (2013 – £5.03)

Under 18 – £3.79 (2013 – £3.68)

The minimum wage for apprentices has also increased to £2.73 (2013 – £2.68). This rate is payable to apprentices aged between 16 and 18. It is also the minimum wage rate for 19-year-olds and over who are in the first year of their apprenticeship.

Following the completion of their first year and providing that they are aged 19 or over, they will be entitled to the usual minimum wage for their age group.

The majority of people are entitled to the minimum wage. This includes part-time workers, casual labourers (even if they are only hired for a day), trainees and foreign workers.

The minimum wage must also be met for those workers who are paid based on their output. For example, a machinist in a factory is paid £1 per unit completed. For this example, we will assume that the machinist is aged 25 and therefore qualifies for the highest minimum wage. The machinist would therefore have to complete 7 units in an hour in order to receive a wage equal to or more than the minimum wage. If something were to happen; for example, the machine broke down for an hour and they were unable to produce any units, the machinist would still qualify for the minimum wage of £6.50.

Please note that the above is a very basic example. If you do employ staff without a specific hourly rate, and you pay your staff based on their output, you may be breaching the minimum wage rules. If you are worried about this or wish to discuss it in further detail, then please do not hesitate to contact us.

There are certain people who do not qualify for minimum wage, these include, self-employed people, company directors, volunteers, individuals on work experience, members of the armed forces and workers under the age of 16.

It is a criminal offence to pay employees less than the minimum wage, or to falsify wage records; therefore, care should be taken to ensure that wages are paid in accordance with the legislation.

Pointers

  • The majority of people are entitled to the minimum wage
  • Be careful of employing staff without a specific hourly rate or based on their output
  • You may be breaching the minimum wage rules
  • It is a criminal offence to pay employees less than the minimum wage, or to falsify wage records

Apr 16, 2015