Increase in National Minimum Wage Rates (1st October 2014)

3 years ago

GOV.UKDid you know that each year on the first 1st October that National Minimum Wage (NMW) rates increase?

Did you also know that since National Minimum Wage was introduced, the number of employees on it has doubled to around 1.2m employees, or 1 in every 20!

So what is ‘National Minimum Wage’?

If you employ someone between the ages of 16 and 20 regardless of the size of your business, whether the employee is full or part time, paid weekly or monthly, then it’s likely they are entitled to be paid at least the National Minimum Wage (NMW) and as an employer it’s your responsibility to pay it.

So what happens if you get it wrong?

Any employers not complying with NMW and mistakenly underpaying their employees could be subject to penalties or fines ranging between £100 and £5,000 and, in the most serious cases, unlimited fines, so it’s really important that you get it right.

What are the NMW rates from 1st October 2014?

Workers age Rate from 1 Oct 2014 Rate from 1 Oct 2013
21 and over £6.50 per hour £6.31 per hour
18 to 20 £5.13 per hour £5.03 per hour
16 and 17 £3.79 per hour £3.72 per hour
The apprentice rate* £2.73 per hour £2.68 per hour

 

*Note: For apprentices aged 16 to 18 and those aged 19 and over who are in the first year of their apprenticeship.  Once an apprentice is aged 19 and in at least the second year of their apprenticeship, they are entitled to the relevant national minimum wage rate.

What if my employee has signed a contract which is less than the NMW?

Your employee is entitled to NMW regardless of any contract even if they have signed it under their own free will.  The contact would have no legal standing and the employee should still be paid the proper NMW rate.

Where can I find out more information about National Minimum Wage?

You can find out more about the NMW legislation by visiting the GOV.UK website www.gov.uk/national-minimum-wage

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