What is the National Minimum Wage?

The National Minimum Wage (NMW) is the minimum amount of pay per hour most workers are entitled to by law. The rate will depend on the worker’s age and if they are an apprentice.

Points to note

  • The compulsory National Living Wage (NLW) is the national rate set for people aged 25 and over.
  • Most workers over school leaving age will be entitled to receive the NMW or the NLW.
  • The NMW/NLW rate is reviewed annually by the Low Pay Commission.
  • HM Revenue & Customs (HRMC) can take employers to court for not paying the correct level of pay as stated within the NMW/NLW banding. 

Rates of pay

It is important to note that these rates, which come into force on the 1 October 2016, apply to pay reference periods beginning on or after that date.

In October 2016 the new rates will be:

  • £6.95 per hour – 21-24 years’ old
  • £5.55 per hour 18 – 20 years’ old
  • £4 per hour – 16-17 years’ old
  • £3.40 per hour for apprentices under 19, or 19 or over who are in the first year of apprenticeship.

The National Living Wage

The Government’s National Living Wage was introduced on 1st April 2016 for all working people aged 25 and over, and is set at £7.20 per hour. The current National Minimum Wage for those under the age of 25 still applies.

For help or assistance in applying these changes please don’t hesitate to contact Lee Reynolds on 01788 539000.