Millions of workers will get a boost when the national minimum wage increases. The National Minimum wage and the National Living Wage are both being increased from 1st April 2023. The increase was announced by chancellor Jeremy Hunt last November. This increase is going to affect around 2.5 million people and an increase of around 10% compared to last year.
What is the Minimum Wage?
By law, an employer is required to pay a minimum amount on average for the hours the employee works. This is called the
National Living Wage (NLW) if you are aged 23 or over
National Minimum Wage (NMW) if you are aged under 23 or an apprentice
The rates that would apply from 1 April 2023 are as follows:
Who is entitled to the National Minimum Wage?
Almost all the workers stand entitled to the National Minimum Wage, including:
In the case of self-employment or a company director, they are not entitled to the National Minimum Wage. The are also other set of workers who don’t qualify for the National Minimum Wage. An individual must be at least school-leaving age to get the National Minimum Wage.
How are the National Minimum Wage and National Living Wage calculated?
Generally, deductions from your pay before the National Minimum Wage are calculated. If you have paid for certain deductions related to your job out of your wages, your employer should deduct these payments before they calculate whether you’ve been paid the correct minimum wage.
These payments would stand for:
The employers own use or benefit- for example, if you’ve paid for travel between work sites
Things you need for the job but aren't refunded for- this could be tools, uniform or other work equipment.
All the other payments made out of your wages such as tax and National Insurance, should be included when your employer calculates whether you’ve been paid the National Minimum Wage.
What counts as working time and is it applicable if it's not an hourly rate?
The National Minimum Wage is generally calculated at an hourly rate. The employers calculate the number of working hours against the qualified national minimum wage towards your salary. However, it also applies if you are not paid by the hour.
What doesn’t count towards the National Minimum Wage?
If you are getting paid at a higher rate than the standard pay rate for the work you do, like overtime, weekend or night shifts, on bank holidays, longer than a certain number of hours these wouldn’t come under National Minimum Wage.
If you are paid a higher rate, this premium element of pay would not get counted towards your minimum wage pay. This premium element pay is the amount the higher pay rate exceeds your basic rate.
The employers also can't count the following towards the minimum wage pay:
Tips or gratuities
Cover charges from customers
However, the employer can include incentive payments or bonuses as part of the basic pay.
What can be done if you think you have been paid less than the correct minimum wage?
The first step you must take if you think you're being paid less is to talk to your employer. If this doesn’t solve the problem, you can ask to check your payment records and also request a copy of the same.
Alternatively, if talking to your employer doesn’t work, you can take confidential advice for free to help solve your payment dispute, you can contact one of these workplace advice services mentioned below:
Call the Acas Helpline on 0300 123 1100 or visit Acas (England, Wales and Scotland)
Call the Labour Relations Agency Helpline on 0289 032 1442 or visit the Labour Relations Agency (Northern Ireland)
You can also lodge a complaint to HMRC about your employer
If HMRC finds that you were incorrectly paid, your employer must pay you any amounts they owe you and pay a fine to HMRC for paying below the minimum wage.