The National Minimum Wage and National Living Wage are the legally mandated pay rates in the UK, ensuring fair compensation for workers. These rates vary based on age and employment status, such as apprenticeships, and are updated annually.

Current Minimum Wage Rates (2024-2025)

As of April 2024, the minimum wage rates are as follows:

1. Aged 21 and over (National Living Wage): £11.44 per hour
2. Aged 18-20: £8.60 per hour
3. Under 18: £6.40 per hour
4. Apprentices: £6.40 per hour (if under 19 or in the first year of apprenticeship)

From April 2025, these rates will increase to:

1. Aged 21 and over: £12.21 per hour
2. Aged 18-20: £10.00 per hour
3. Under 18: £7.55 per hour
4. Apprentices: £7.55 per hour

This increase aims to ensure that workers continue to receive fair wages that align with the cost of living and economic conditions.

Who is Entitled to the Minimum Wage?

Workers must be at least school-leaving age to qualify for the National Minimum Wage and 21 or older to receive the National Living Wage. Eligibility includes part-time and full-time employees, apprentices, agency workers, and even some offshore and foreign workers.

However, certain individuals are not entitled to the minimum wage, such as:

1. Self-employed individuals
2. Company directors
3. Volunteers and voluntary workers
4. Members of the armed forces
5. Prisoners
6. People living and working within religious communities

Employer Responsibilities and Compliance

Employers are legally required to pay at least the minimum wage and maintain payment records for at least six years. Failure to comply can result in penalties, fines, and legal actions by HM Revenue and Customs (HMRC). If underpaid, employees can raise disputes directly with their employer or report it to HMRC.

Minimum Wage Calculations

Certain payments and deductions are factored into wage calculations: Included: Income tax, National Insurance, wage advances, accommodation allowances above £9.99 per day. Excluded: Travel expenses, uniforms, tips, and penalty deductions for misconduct.

How to Address Minimum Wage Disputes

If an employee believes they are underpaid, they should first discuss the issue with their employer. If unresolved, they can request payroll records or contact Acas for assistance. HMRC can investigate complaints, issue fines, and recover unpaid wages on behalf of workers.

Final Thoughts

Understanding the National Minimum Wage and National Living Wage is crucial for both employees and employers to ensure fair pay practices. Regular updates to wage rates mean staying informed is essential for compliance and financial planning.