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Most workers are entitled to receive the national minimum wage but some specific categories are excluded, for example, true volunteers and students on a work experience placement arranged through their place of learning which lasts less than 12 months. The obligation to pay minimum wage applies equally to all businesses regardless of their size and workers are entitled to receive it from the first day of their employment.
There are various categories of minimum wage and workers are generally divided by their age. The current ages that have a minimum wage applied are as follows:
- Age 21 or over
- Age 18 – 20
- Over compulsory school age but not yet 18
- Apprentice rate
Workers who are still of compulsory school age are not entitled to the national minimum wage. The rates are regularly reviewed and any changes take effect in October each year.
Workers must receive the minimum wage on average for each hour worked in the “pay reference period” i.e. the interval at which the worker is paid e.g. a week for weekly paid workers, a month for monthly paid workers.
How do I ensure I meet my obligations?
To ensure that obligations are being met, a calculation should be done where the amount earned in the pay reference period is divided by the number of hours worked. The result should be at or higher than the appropriate age related rate. There are special rules on which parts of pay and which hours of work should be used in the calculation.
Breaking minimum wage law carries a maximum £20,000 fine. Let the experts at Employers Direct guide you so that you don’t suffer from this punishment.
For free advice on Minimum Wage call Employers Direct now on 0800 144 4050.