Most people at work are entitled to be paid at least the National Minimum Wage (NMW), provided they are aged 16 years or over. This includes:
For more information on the groups of workers who qualify for the NMW please take a closer look at the TUC 'Enforcing Basic Workplace Rights' guide.
Groups who are not entitled to be paid at least the NMW include:
For more information on who qualifies for the NMW please take a closer look at the 'Enforcing Basic Workplace Rights' TUC guide.
NB you cannot contract out of the NMW, by agreeing with your employer in writing or orally that you will not be paid the NMW. Such an agreement will be void and not effective. You will still have the right to be paid the NMW.
The NMW rate which applies will depend on your age and whether you an apprentice.
For information on the current NMW rates, please see the link below:
When checking whether you are being paid the NMW, you will need to be aware of:
This guide provides only basic advice. As the rules for calculating the NMW are complicated you may want to seek advice from your union rep or the Pay and Work Rights Helpline if you are not sure if you are being paid the NMW.
The NMW is set at an hourly rate but that does not mean you must be paid at least the NMW for each hour that you work. Rather your average hourly pay must be at least the NMW, as worked out over the 'pay reference period'. The pay reference period is the interval between which you are normally paid. If you are normally paid on a daily basis your pay reference period is one day; if you paid weekly it will be one week and if you are paid monthly, it will be one month.
Your pay reference period cannot be longer than one month. If you are normally paid quarterly, you have a right to be paid at least the NMW on average during each month within that quarter.
Most people can easily work out whether they are getting the NMW by dividing their pay (before tax and other permitted deductions - see below) by the number of hours worked.
Next you must work out which forms of pay count towards NMW pay.
The basic calculation to check whether you are being paid the NMW for a pay reference period is
Total pay - deductions and payments which do not count to the NMW = NMW pay
Your NMW pay is calculated on your 'gross pay' paid during the pay reference period.
Your gross pay includes:
Your employer can only make deductions from your pay if certain conditions are met. Before making any deductions from your pay your employer must comply both with general rules on lawful deductions (see below) and NMW rules on deductions outlined in this section.
Certain deductions which your employer can make from your gross pay will also 'count' towards your NMW pay.
When checking whether you have received the NMW you should add these deductions to your take home pay then calculate whether you have received the NMW.
If you choose to buy goods and services from your employer which are not connected with your employment - for example buying food and drink from a staff canteen - such payments can also 'count' towards your NMW pay.
This however will not include any payments for goods or services which you need to be able to do your job or which you are required to purchase under your contract.
Certain deductions and payments do not count towards your NMW pay.
These include deductions and payments made by your employer for:
When checking whether you have received the NMW you should subtract these deductions from your gross pay and then calculate whether you have received the NMW.
It is unlawful for employers to make such deductions or to require you to make such payments if it means you do not receive the NMW. This is the case even if you have agreed in writing to such deductions or payments or they are referred to in your contract.
Some forms of pay do not count towards your NMW pay. You should deduct these forms of pay from your total pay when checkingwhether you have been paid at least the NMW.
Forms of pay which do not count towards the NMW include:
Benefits in kind are anything your employer provides you other than pay. There is nothing to stop an employer from providing benefits in kind. But benefits in kind (or their equivalent value in money) cannot count towards your NMW pay. The only exception is a set amount for accommodation (see below).
Examples of benefits in kind which do not count towards your NMW pay are:
If your employer provides you with accommodation, they can count some of the cost of the accommodation towards your NMW pay. This is called the accommodation offset.
The accommodation offset is capped by the law. For information about the current limit for the accommodation offset please follow this link: http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_175108
It makes no difference if:
Once you choose to occupy the accommodation, the maximum amount your employer can 'count' towards your NMW payments for rent is the accommodation offset.
Your employer can charge more rent than the accommodation offset. However they must ensure that you receive NMW payments after you have paid any rent over and above the accommodation offset.
In addition to the accommodation itself, any charges you have to pay your employer for gas, electricity, water bills, cleaning, laundry and the provision of furniture are included in the rent for the purposes of the accommodation offset.
If someone other than your employer provides the accommodation, but there is a connection between your employer and your landlord, your employer will still be treated as providing you with the accommodation under NMW rules.
For information about your rights if you work for a social housing provider (such as a local authority or a registered social landlord), please follow this link: http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_175108
Want to hear about our latest news and blogs?
Sign up now to get it straight to your inbox
To access the admin area, you will need to setup two-factor authentication (TFA).