The government will name and fine employers for underpaying their employees so this is what you need to know in order to check you are paying your employees the correct minimum wage and are keeping sufficient records.
The minimum wage is worked out at an hourly rate, but it applies to all eligible workers even if they’re not paid by the hour.
This means that – however you pay someone – you need to work out their equivalent hourly rate to make sure you’re paying the minimum wage.
The rates below apply from 1 April 2018.
|Category of worker||Hourly rate|
|Aged 25+ (national living wage rate)||£7.83|
|Aged 21 to 24 inclusive||£7.38|
|Aged 18 to 20 inclusive||£5.90|
|Aged under 18 (but above compulsory school leaving age)||£4.20|
|Apprentices aged under 19||£3.70|
|Apprentices aged 19+, but in the first year of apprenticeship||£3.70|
The government has named and fined employers for underpaying the National Minimum Wage and National Living Wage.
Use 52 and 1/7 weeks (52.142857) to calculate an annual salary (e.g. £7.83 per hour x 37.5 contracted hours per week x 52.142857 weeks = £15,311 salary per year).
Failure to keep sufficient records to show that at least the National Minimum Wage or National Living Wage has been paid is a criminal offence. Your payroll records will help, but you must keep records that show the number of hours your workers have worked such as timesheets or clockcards.
You must keep these records for at least three years, but it’s a good idea to keep them for six years, as this is generally the maximum amount of time in which a complaint can be submitted to court.
If you have any questions, please contact Karen Harries or Andrea Cormor in our Payroll team on email@example.com or 01242 776000.