Minimum wage to increase to £6.31
In April this year the government announced the national minimum wage is to rise effective from October 2013.
The national minimum wage sets minimum hourly rates that employers must pay their workers. It covers almost all workers in the UK. The Department for Business, Innovation & Skills has announced the national minimum wage rates from 1 October 2013 are as follows:
the main adult rate (for workers 21 and over) will increase by 12p to £6.31 an hour
the rate for 18-20 year olds will increase by 5p to £5.03 an hour
the rate for 16-17 year olds will increase by 4p to £3.72 an hour
the rate for apprentices will increase by 3p to £2.68 an hour
Apprentices aged 19 or over who have completed one year of their apprenticeship are entitled to receive the national minimum wage rate applicable to their age.
Please also note that the definition for ‘workers’ can also sometimes include self-employed people. So if you provide any self-employed agents with contracts, they could meet the criteria of ‘workers’ for national minimum wage
It makes no difference to a worker’s entitlement to the national minimum wage whether they work for you full time or part time, or whether they are an agency worker, a temporary or casual worker, a piece worker or a home worker.
Correctly calculating pay based on hours & type of work
Every employee who’s entitled to national minimum wage must be paid at least their national minimum wage rate on average for every hour worked in each pay reference period (E.g. weekly or monthly). For national minimum wage purposes, there are four different types of work, and there are different rules for calculating the number of hours worked for each of these. The four types of work are:
- time work
- salaried-hours work
- output work
- unmeasured work
For more information on how the national minimum wage applies to each type of work, please contact the Stafford & Co payroll team
You must keep records that show you pay at least the national minimum wage to anyone who works for you and is entitled to it. You must keep these records for at least three years, (five years in Scotland) in order to show that you have paid at least national minimum wage rates if a civil claim is brought against you. HMRC compliance officers are entitled to ask you to produce your payroll records for inspection.
What to do if you haven’t paid national minimum correctly.
Calculating arrears: if you realise you haven’t paid a worker at least the national minimum wage requirement, then you must calculate any arrears using he appropriate HMRC formula; this means you may end up paying more than you would have if you had paid the correct amount to start with.
Enforcement & penalties
HMRC enforces the national minimum wage. If HMRC finds you have underpaid the national minimum wage it will issue a notice of underpayment. This will show the arrears you must pay to your workers and the penalty you must pay to HMRC.
Paying national minimum wage – further help
If you need more help and advice about paying the national minimum wage, please contact the Stafford & Co payroll team