Minimum wage

New Minimum wage rates

The new minimum wages rates, which take effect from April 2019 are:

25 and over        £8.21

21 to 24                £7.70

18 to 20                 £6.15

Under 18              £4.35

Apprentice         £3.90

Apprentices are entitled to the apprentice rate if they’re either:

  • aged under 19
  • aged 19 or over in their first year of their apprenticeship
Minimum wage

Top 10 mistakes employers make when paying the National Minimum Wage

There are lots of reasons why an employer might find themselves not paying the
National Minimum Wage (NMW) correctly. To help you avoid making mistakes HMRC
have drawn together a list of the most common reasons that cause underpayment.
1. Failure to apply the annual minimum wage rate increase as they go up each year
on 1 April.

2. Missed birthdays as employees turn 18, 21 or 25 years old and move from one
NMW rate to another.

3. Paying the apprentice rate to somebody who isn’t actually an apprentice.
Recognised apprentices must have an apprenticeship contract and undergo an
element of structured training.

4. Continuing to pay the apprentice rate for too long. The apprentice rate only
applies to apprentices who are under the age of 19, or if aged 19 or over within
the first year of their apprenticeship.

5. Making wage deductions for items or expenses that are connected with the job.
This could include, for example, safety clothing, uniforms, tools etc.

6. Making wage deductions that are deemed to be for the employer’s “own use or
benefit”. For example a Christmas club saving scheme. It doesn’t matter that the
worker can choose to buy into the scheme and the employer doesn’t have to make
a profit from it.

7. Charging a worker more than the stated offset rate for living accommodation,
currently £49 a week.

8. Not paying for all the time worked such as time spent travelling, training or
downtime at the employer’s disposal.

9. Not paying for additional time worked such as time spent clearing security checks
once a worker’s shift has finished.

10. Including elements of pay that don’t count towards minimum wage such as tips
and the premium element of pay associated with shift premium.

Source HMRC Employer’s Bulletin 75

Minimum wage

Minimum wage guidance update – ‘Sleep-in’ shifts

Guidance on calculating the minimum wage has been updated to reflect the joined employment law cases of Mencap v Tomlinson-Blake and Shannon v Rampersad with regard to sleep-in shifts.

“Sleep-in” shifts

In some sectors – including, but not only, the care sector – workers are required to stay at or near their workplace on the basis that they are expected to sleep for all or most of the period, but may be woken when required to undertake work. Such shifts normally occur at night but could occur during the day. If the employer provides suitable facilities for sleeping, minimum wage must be paid for time when the worker is required to be awake for the purpose of working, but not for time the worker is permitted to sleep. However, if suitable sleeping facilities are not provided then minimum wage must be paid for the entire shift.

The position is different where workers are working and not expected to sleep for all or most of a shift, even if there are occasions when they are permitted to sleep (such as when not busy). In this case, it is likely minimum wage must be paid for the whole of the shift on the basis that the worker is in effect working all of that time, including for the time spent asleep.

Each case may be different depending on all of its individual circumstances, including what the contract provides and what is happening in practice. If you are unsure about the arrangements you have in relation to the National Minimum Wage you can contact the Acas Helpline on 0300 123 1100.

The Supreme Court

This guidance reflects the law as it currently stands, in particular as determined by the Court of Appeal’s judgment in the joined cases of Mencap v Tomlinson-Blake and Shannon v Rampersad ([2018] EWCA Civ 1641). If the Supreme Court considers the appeal being made, it might issue a judgment which changes the circumstances in which national minimum wage is due for sleep-in shifts. Any judgment is unlikely to be issued before 2019 and possibly not until 2020.

Whilst any challenge in the Supreme Court is ongoing, employers must continue to comply with the law as it currently stands.

Source CIPP 14-11-2018

Employment Law Minimum wage

Are you paying Apprentices the correct rate?

The start of the new academic year often coincides with an increase in the number of young people starting an apprenticeship. Data shows that nearly a fifth of apprentices at Level two and Level three are paid less than the appropriate National Minimum Wage (NMW) or National Living Wage (NLW).

The NLW and NMW rates increased on 1 April. The new rates must be applied from the first day of the first pay period on or after 1 April 2018 and are as follows:

Apprentices are entitled to the Apprentice rate of £3.70 per hour (previously £3.50 per hour) if they are:

Aged under 19

Aged 19 or over and in the first year of their apprenticeship.

Apprentices aged 19 or over who have completed the first year of apprenticeship are entitled to the age-related minimum wage:

– 19 to 20 year olds are entitled to at least £5.90 per hour

– 21 to 24 year olds are entitled to at least £7.38 per hour

– 25 year olds and over are entitled to at least £7.83 per hour.

The Government is currently running a campaign advising apprentices to check their pay and complain if they are being paid incorrectly. If you are not paying the correct rate you may receive a Notice of Underpayment from HMRC, setting out the arrears to be paid to your workers together with a penalty. Employers may also be publicly named.

Source HMRC