By Rachel Lawler
With the government releasing a list of employers caught paying their staff less than the minimum wage, we’ve had a look at the current rules to help you ensure that your setting is compliant with the rules.
What is the new National Living Wage?
The National Minimum Wage is the minimum hourly rate some employees under the age of 25 should be paid. The National Living Wage is the minimum hourly rate for those aged 25 or over.
On 1 April the National Living Wage increased to £7.83 an hour – up 38p from the previous year. The minimum rates for employees of all ages has also increased, as explained below.
|Age 25 and over||21 to 24||18 to 20||Under 18||Apprentice|
Employers who already pay wages above these rates are not obliged to increase their rates when the National Minimum Wage increases.
Who is entitled to receive the minimum wage?
Some employees are not entitled to receive the national minimum or national living wage. This includes those who are self-employed, volunteers and company directors. Work experience students may not be entitled to the minimum wage if they are aged under 16 or are shadowing an employee rather than taking on a separate role themselves.
Some work experience students, or interns, will be entitled to the minimum wage if they are given a contract or if they are offered a future contract or offer of work at the end of their placement.
What are the rules for apprentices?
All apprentices must be paid at least the minimum wage for the time they spend training or studying as part of their apprenticeship, as well as any time they spend working in your setting. From 1 April 2018 onwards this is £3.70 an hour.
Apprentices can only be paid the apprenticeship wage if they are under 19, or if they are aged 19 or over but in their first year of their apprenticeship. If an apprentice is aged 19 or over, and has completed the first year of their course, they must be paid the higher National Minimum Wage for their age group. (See chart above.)
Are employers allowed to charge employees for any training courses they complete?
If the training is mandatory, an employer must make sure that any deductions made or payments taken do not take their employees’ salaries below the minimum wage.
If employees are required to attend or complete any training, they must be paid for their time. This should be paid at the minimum required rate or above. They should be paid for this time whether it is within their usual working hours or not.
Can staff be charged for their uniform, if the setting has one?
If your setting requires staff to wear a uniform, employers must make sure that any deductions taken from staff to pay for it do not take their employees’ wages below the minimum wage.
If your setting offers a uniform, but staff are not required to wear it, the employer may charge staff for any items they choose to purchase. You may also charge staff for additional items of uniform if they have requested them – for example, an extra t-shirt to use as a spare.
Do employees have to be paid for all the time they spend at your setting?
Employees should be paid at least the minimum wage for any time they spend working at your setting. This doesn’t include any unpaid lunch or tea breaks taken on site, although some staff may have paid breaks in their contract.
You can ask staff to sign in and out at the start and end of their shift to monitor this. You may wish to keep this separate from any register you use to check staff in and out of the premises for safeguarding and health and safety purposes, particularly if any members of staff choose to spend their unpaid breaks onsite.
How should staff be charged for any childcare they use at the setting themselves?
If members of staff choose to send their own child to the setting where they work employers should be careful about how this is paid for, particularly if the employee is earning the minimum wage. Employers can deduct the cost of the childcare from the employee’s wages before they are paid, but they should explain how this will be done in their contracts. The employee’s wage slip must clearly detail the deductions. You may wish to pay the member of staff in full and invoice them separately for any childcare they have used instead.
What will happen if an employer is caught paying staff less than the minimum wage?
All businesses, irrespective of size or sector, are responsible for paying the correct minimum wage to their staff.
Employers who are found to have broken the law must pay their workers the wages they are owed. On top of any back pay, they can also be fined up to 200% of the total amount in arrears to workers.
Some employers who fail to pay their staff the minimum wage may also be publically named and the worst offenders may face criminal prosecution.
A spokesperson for HMRC told Under 5: “HMRC enforces the National Minimum and National Living Wage in line with the law and policy set out by the Department for Business, Energy and Industrial Strategy. All businesses, irrespective of size or business sector are responsible for paying
the correct minimum wage to their staff. HMRC always takes action to ensure that workers receive what they are entitled to.”
Find out more
If you have questions about the National Minimum or National Living Wage, whether you are an employee or an employer, you can get in touch with Acas at www.acas.org.uk or call 0300 123 1100.