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Work and Wages

Minimum Wage

Workers in the UK aged 16 (and above school leaving age) or over are legally entitled to a national minimum hourly wage. It does not depend on the location of their work, the size of the firm or the worker’s occupation. This includes casual labourers, agency workers, home workers, agricultural workers, probationary workers, and part-time workers, workers on short-term contracts and workers employed by subcontractors. The minimum age in UK depends on the worker’s age and apprenticeship. 

If the employer provides the worker with free accommodation, an amount of £6.00 per day (£42 per week) may be deducted from workers’ pay.

The National Minimum Wage rate is determined by the Secretary of State on the recommendation of Low Pay Commission. The Commission comprises an independent chair and 09 members (members representing workers, employers' interests as well as independent experts).

Wages may also be set by collective bargaining agreement, however any provision in an agreement is void if it purports to exclude or limit any provision of the National Minimum Wage Act 1998.

In order to ensure that the piece rate workers are paid the minimum wage rate, a worker and employer may come to a ‘fair estimate’ of the number of hours required to complete the work, prior to the work being carried out. Alternatively, a worker may keep a record of the hours of work carried out, and then the employer is informed accordingly.

The BIS (Department for Business, Innovation & Skills) has updated its policy on the enforcement of the national minimum wage, which includes the revised scheme for naming and shaming employers (all employers, even if the breaches are minor, provided HM Revenue and Customs (HMRC) has issued an underpayment notice). The financial penalty payable by employers who underpay the NMW has been increased from 100% to 200% of the underpayment.

Sources: The National Minimum Wage (Amendment) (No. 2) Regulations 2014 (SI No. 2485 of 2014); The National Minimum Wage Regulations 1999; National Minimum Wage Act, 1998)

For updated minimum wage rates, kindly refer to the section on minimum wages.

Regular Pay

All employees are entitled to be paid for the work they have done. Workers are also entitled to be paid if they are ready and willing to work but their employer has not provided them with any work to do, unless a worker’s employment contract says otherwise. The way that an employee's wages are paid will depend solely on what their contract of employment says about how their wages should be paid. Employment contracts must state the scale or rate of remuneration or the method of calculating remuneration, the intervals at which remuneration is paid (that is, weekly, monthly or other specified intervals), the currency in which remuneration is to be paid and any additional remuneration payable to him. The maximum pay reference period (wage interval) can be one month however; wages can still be paid at daily, weekly or other specified intervals. Employers are legally allowed to make deductions from the wages for Income Tax, Pay as You Earn (PAYE) and National Insurance contributions. Any other deductions made such as contributions to pension schemes have to be agreed with the employee first. An employee has the right to be given by his employer, at or before the time at which any payment of wages or salary is made to him, a written itemized pay statement showing the exact pay and how much has been deducted for National Insurance and tax.

Source: §1 & 8-10 of Employee Rights Act 1996; Regulation 10 of the National Minimum Wage Regulations 1999

Regulations on Work and Wages

  • Employment Rights Act (ERA), 1996 last amended in 2012
  • National Minimum Wage Act, 1998
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