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What is the Minimum Wage and Who Does it Apply To?

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All workers are probably aware of the national minimum wage, but do you know exactly what it is and whether or not it applies to you? Would you know where to go if you thought you weren’t being paid the correct amount? This guide provides you with the basic information you should know.

What is the Minimum Wage?

The minimum wage is the set amount that the majority of workers should be earning at an equivalent hourly rate. This amount applies if you have a contract of employment, whether written or verbal. It’s guaranteed by law and covers both large and small businesses. Workers cannot agree to work for less, unless there are specific reasons such as living at home and working within the family business.

There are different rates depending on your age. The current rates (pre-October 2013) are:

21 and Over: £6.19

18 – 20: £4.98

Under 18: £3.68

Apprentice: £2.65

Rates are changing in October 2013 to the following:

21 and Over: £6.31

18 – 20: £5.03

Under 18: £3.72

Apprentice: £2.68

Current Apprentice rates

If you’re currently on the first year of an apprentice scheme and under 19 you’ll receive £2.65. For those past the first year or over 19 you’ll get the age related rate. From October 2013 the rates for all age groups will rise, with the minimum wage for those over 21 being £6.31.

There are no rules about how much over the minimum wage you can be paid, but it’s against the law for employers to pay less than this.

Who Does the Minimum Wage Apply To?

Most workers over school leaving age should be paid at least their appropriate minimum wage. These rules still apply to part time workers, casual labourers, those employed through an agency, commission based employees, home workers and foreign employees.

Not everyone is paid an hourly rate, but the minimum wage still applies to these workers. There are online systems to work out how much you should be receiving per hour for jobs where you’re paid an annual salary, by how many tasks or items you complete and for jobs where you’re paid a set amount.

There are some groups of workers, though, for whom the minimum wage doesn’t apply. These include the self-employed, company directors, people on Government employment programmes, those in the armed forces and prisoners.

What Help is Available if you’re Not Paid the Minimum Wage?

It is a criminal offence for employers to not pay the appropriate minimum wage and HMRC can carry out checks at any time. If employers discover that they’ve not paid the correct amount, they must rectify the situation straight away.

Minimum wage

To comply with HMRC procedures, it’s a requirement for businesses to retain three years worth of payment records as proof that they’ve paid employees correctly. They can request these records at any time and will investigate companies where a complaint regarding mis-payment has been made.

If you have cause to doubt that you’ve been paid the correct salary then your first port of call should be your employer. It’s always better to bring this matter up personally rather than involving outside agencies if it can be avoided. If they refuse to resolve the situation or try and claim they’ve paid the correct amount, you have the right to see your payment records.

Once the case is referred to HMRC they will demand that the employer pays the arrears immediately, as well as a penalty. For those who still refuse to pay, they can be taken to court.

For additional help and advice in dispute situations there is a confidential Pay and Work Rights Helpline. You also have the right to take your case individually to an employment tribunal.






About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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