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National minimum wage – your guide

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The new National Minimum Wage comes into force from 1 October 2013. So you will need to ensure that you revise your rates accordingly to ensure that you remain compliant.
At the same time, a revised National Minimum Wage naming scheme will come into effect, allowing the Government to name and shame any employer who breaks minimum wage law. This is in addition to financial penalties which employers can face if they fail to pay staff the National Minimum Wage.

What is more, the National Minimum Wage now applies to firms involved in agriculture and horticulture.

To help you get a quick grasp of the new rates and the rules for the National Minimum Wage, we have put together this brief guide.

What are the new rates?
The new rates are as follows:

  • The standard (adult) rate (workers aged 21 and over) will rise to £6.31.
  • The development rate (workers aged between 18 and 20) will rise to £5.03.
  • The young workers rate (workers aged under 18 but above school leaving age who are not apprentices) will rise to £3.72 per hour.
  • The rate for certain apprentices (those under 19 years of age or those aged 19 and over but in the first year of their apprenticeship) will rise to £2.68 per hour.

Can I get around paying the National Minimum Wage?
The simple answer is ‘No’. The National Minimum Wage is a statutory minimum.  As such, the employee and/or employer cannot agree a lower rate of pay.

Even if you state in your staff’s contracts of employment that they are entitled to a lower rate, you are obliged by law to pay them the new rates from 1 October 2013.

Most workers in the UK over school leaving age are legally entitled to be paid at least the National Minimum Wage and it makes no difference:

  • if they are paid weekly or monthly, by cheque, in cash or in another way;
  • if they work full time, part time or any other working pattern;
  • if they work at their employer’s own premises or elsewhere;
  • what size employer they work for; or
  • where in the UK they work.

Do I have to pay the National Minimum Wage to interns and work experience students?
Whether or not a work experience student or ‘intern’ is entitled to the National Minimum Wage will depend on the arrangements under which they are working.  Either the person will be a worker eligible for the National Minimum Wage , a worker who is expressly exempt from being eligible for the National Minimum Wage or not a worker and therefore not eligible for the National Minimum Wage .

The following, are not entitled to receive the National Minimum Wage :

  • Students doing work experience as part of a UK based higher or further education course, where their placement does not exceed 1 year.  This does not include those students who take a gap year, or who take on work which is not a part of their course.
  • Those who are of compulsory school age.
  • Those who are engaged as a genuine volunteer for a charity, a voluntary organisation, an associated fundraising body or a statutory body.  They must only receive limited and specific benefits such as reasonable travel or lunch expenses and are not entitled, under the terms of their employment, to receive any other monetary payments or benefits in kind.
  • Those who participate in Government and European programmes have no entitlement to the National Minimum Wage for work done as part of the programme.

However, if the work experience student or ‘intern’ is actually completing “proper” work rather than just shadowing someone else, is expected to attend work during specific hours and would be subjected to a detriment if they failed to do so, this a strong indication that they are likely to be considered as “workers” and are, therefore, entitled to receive the National Minimum Wage.  Don’t fall into the trap of labeling someone as an intern and thinking that you are safe from the National Minimum Wage.  For further advice on this area, do contact us.

How can I stay the right side of the law with the National Minimum Wage?

  • Check with your payroll department to ensure that all employees’ are receiving the National Minimum Wage or above.
  • Identify any work experience students or ‘interns’ in your organization and assess the type of work they are asked to perform whilst they are at your organisation.  In particular, are they doing “proper” work or are they simply participating in genuine work experience such as shadowing?
  • Depending on the outcome of the assessment above, it may be that you need to re-evaluate your organisation’s strategy in relation to taking on work experience students and ‘interns’.  This may include evaluating the type of work given to them or whether your organisation wishes to continue with such schemes.
  • Consider keeping records of agreements that the organisation makes with the work experience student or ‘intern’, the tasks they are asked to perform and the hours they are asked to work. It is helpful to create a “paper-trail” in the event that a work experience student or ‘intern’ attempts to bring a claim against the organisation for failure to pay them the National Minimum Wage.

What if I need more advice?
If you want more advice and assistance on the National Minimum Wage, please contact the FB Support team on 01332 226149 for a confidential chat.

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