Are you one of the many employers confused by the terminology used for minimum pay rates?
With the National Minimum Wage, National Living Wage and Living Wage, employers can be left scratching their head wondering how much they are legally required to pay their workers and who is entitled to receive it.
Employers have been caught out by minimum wage rules. Some organisations, including big brands, have even been named and shamed for failing to pay the minimum. In order to ensure you are complying with the law and to avoid reputational damage, we explore the different terminology and give you current rates.
National Living Wage
The National Living Wage is the minimum rate for those workers aged 25 and over. Introduced in April 2016, it is a statutory requirement. As of April 2018, the rate is £7.83 per hour and the aim is for this to reach £9 per hour by 2020.
National Minimum Wage
The National Minimum Wage is the rate for those under the age of 25. As with the National Living Wage, employers are legally required to adhere to this minimum.
As of April 2018, the current rates are:
- for 21 to 24 year olds, the rate is £7.38
- for 18 to 20 year olds, the rate is £5.90
- for 16 to 17 year olds, the rate is £4.20
- for apprentices, the rate is £3.70.
They are entitled to this if they are under 19 or aged 19 or over and in the first year of their apprenticeship. Apprentices are entitled to the minimum wage for their age if they are over the age of 19 and have finished their first year of apprenticeship.
There are some people who are not entitled to the National Minimum Wage or National Living Wage including volunteers and self-employed. To discuss these exemptions further, contact your Employment Law Adviser.
Living Wage
It is currently set at £8.75 per hour across the UK and £10.20 for London.
This is a voluntary rate, which is paid by over 4,200 businesses from both the public and private sectors.
If you have doubts as to your national minimum wage obligations, give our Employment Law Advisers a call to get bespoke and comprehensive advice.
