Generally, everyone who “provides a personal service” is entitled to be paid at least the National Minimum Wage. This includes employees, workers (including agency workers), and certain people who might regard themselves as self-employed.
The rates from 1 April 2022 are:
The rates change every April starting April 2017.
Workers under the compulsory school age are not entitled to receive the National Minimum Wage.
There are however some exceptions to this, and also some special situations. The main exceptions are covered below.
As a non-executive director, you are not entitled to receive the National Minimum Wage unless you also happen to be an employee/worker of the business.
If you are a “family worker”, you are excluded from the National Minimum Wage. This is someone who is treated as being part of the family and who is employed to perform household tasks. This is intended to cover au pairs but each case will turn on its own facts and specialist advice should be sought in all cases.
If you are a student who is undertaking a work experience placement of less than one year as part of a higher education or further education course you are not entitled to receive the National Minimum Wage. However, if the placement is not part of the course the student is likely to qualify for National Minimum Wage.
Where you are undertaking work experience you will not normally qualify for the National Minimum Wage unless you can show you are a “worker”. As with interims, this can depend upon what you do, what is promised, and what benefits you receive. Specialist advice should be sought in all cases, particularly for business who are seeking to reduce risk.
Whether you qualify as an Intern for the National Minimum Wage is not always clear because this depends upon whether you are a “worker”. This can, in turn, depend upon what the employer promises, what you do during your time with the business, and in cases where you are already working, the nature of any payments you have received so far. Again, specialist advice should be sought in all cases – particularly for businesses wishing to take on interns – to minimise risk.
Voluntary workers – where you volunteer for a charity, voluntary organisation, associated fund-raising body or a statutory body – are not normally entitled to receive National Minimum Wage, provided the arrangement or agreement with the worker provides for nothing above and beyond expenses, reasonable subsistence or accommodation.
If you are a volunteer, you are normally exempt from the National Minimum Wage, but if you can show that the arrangement between you and the organisation is such as to make you a “worker” then you may qualify. This can be the case where the arrangement places obligations – rather than simple expectations – upon each party. Each case depends upon its own facts and specialist advice should be sought.
Where accommodation is provided as part of a worker’s remuneration package, an employer is entitled to off-set a maximum of £4.91 against the worker’s daily earnings.
So, if you are a worker you will receive a lower hourly rate than the National Minimum Wage but the accommodation that your employer provides will be treated as making up the shortfall. Employers seeking to provide accommodation – whilst paying workers less – should seek specialist advice.
It is possible that workers who receive a low salary – whilst having to work a large number of hours in the same pay period – will be paid less than the National Minimum Wage on an hourly basis.
For example, if you are a worker and are paid £14,000 and works 43 hours per week, then you will have received the National Minimum Wage based on the current rates. However, if they are paid monthly and there is one month where they work 45 hours or more per week, then their hourly rate of pay will fall below the National Minimum Wage and they would be underpaid for that month.
Traditionally, as an agricultural worker you were entitled to receive a higher rate of pay than the National Minimum Wage – but this is changed from 1 October 2013 as the government sought to phase this out. The pay you are entitled to receive depend upon exactly what type and level of work you do, and it will also upon when they commenced employment. Specialist advice should be sought in such cases. You can view the different rates here.
The entitlement of apprentices is more complicated since it depends upon the type of apprenticeship and the age of the apprentice.
If you work under a contract of apprenticeship or a government apprenticeship (which includes “Apprenticeships” and “Advanced Apprenticeships”) you are entitled to a lower rate for your first year regardless of your age. In the second year of your apprenticeship you are also only entitled to the apprenticeship rate, unless you are over 19, in which case you become eligible for the usual rate of National Minimum Wage that applies to your age range.
Due to a loophole in the law, a person under a new “apprenticeship agreement” is entitled to National Minimum Wage rather than the lower apprenticeship rate – but this is likely to change.
If you are a casual worker – or a person employed under “zero hour contracts” – you are entitled to receive the National Minimum Wage for the time when you work, and on an hourly basis. Unless their contract provides otherwise, generally, you are not entitled to payment for times when you do not work.
Complications can arise where you are a worker who is “on call”. Generally, workers are entitled to be paid for all time when they are at or near work, and where they are required to be available to work – but this will often exclude time spent at home, and it always excludes time spent sleeping. Cases of this nature are often a “grey area” and specialist advice should be sought.
Time spent training – and also time spent travelling for work purposes (but excluding between home and work) – will normally attract the National Minimum Wage.
Some employers pay their workers based on their output, i.e. production. These cases are complicated and specialist advice should be sought.
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