Are You Compliant with NMW?

Employers are being urged to double-check that they are paying at least the level required under the National Minimum Wage (NMW). This increased on 1 April 2017 to £7.50 per hour for those aged 25 and over. Complicated rules mean that even large employers, such as John Lewis, are being caught out.

An employer must pay their workers at least the NMW hourly rate, which applies to all workers, except:

  • those under the age of 16
  • apprentices under the age of 26 during their first year
  • the genuinely self employed
  • family members working in the family business
  • people working and living as part of a family (e.g. au pairs)
  • voluntary workers

When calculating NMW, benefits in kind, expenses, certain allowances and most deductions are not included. Enhanced payments for particular work will not count, but incentive or profit related payments will be included.

Job-related travelling and training time is included. Periods of holiday or absence do not count (even though holiday pay is now obligatory), nor does time taken as rest breaks or industrial action.

Although there is an exemption for family members working in the family business, the regulations specifically refer to the employer's family who are living at home, and exclude limited companies.

Employers face a penalty if HMRC discover that the NMW has not been paid, with workers entitled to payment for the arrears of wages.

For further advice please contact your local Lentells office.