briefing10


	UK NATIONAL MINIMUM NOW £4.20 PER HOUR


	Since 1st October 2002 the main rate of the National Minimum Wage (NMW) has been £4.20 per hour. This main rate applies from a worker’s 22nd birthday. By law the employer must pay such a worker at an hourly rate of at least £4.20. A deliberate failure to do this is a criminal offence for which the employer can be fined. Also, an underpaid worker can be awarded the back pay owed.

The types of UK worker usually entitled by law to the £4.20 or £3.60 minimum rate:-

Full-time workers, part-time workers, pieceworkers, commission workers, freelance workers, workers on ‘permanent’ contracts, temporary workers, agency workers, casual workers, homeworkers, workers old enough to receive the state pension, people from overseas who work in the UK for a short time.

Those not entitled to any legal minimum hourly rate:-

All workers aged under 18, people who normally work outside the UK, some apprentices (see the article on the right for more detail), some trainees (see right), students on sandwich courses, the genuinely self employed, family members working in family businesses, individuals living and working as part of a family (eg au pairs), school children, voluntary workers, members of the armed forces. (Note: there are a few other very rare groups, which are also fully excluded from the NMW).

Young workers
Workers who are aged 18 or over but who have not yet reached their 22nd birthday, are entitled to a lower National Minimum Wage—namely £3.60 per hour. This rate, which is called the ‘development rate’, also came in from last October 1st. An hourly rate of at least £3.60 is a legal entitlement for workers within this particular age range. The employer can’t choose to pay below this rate.

Apprentices & trainees
The following are completely excluded from any National Minimum rate: apprentices under the age of 19; apprentices under 26 and in the first 12 months of their apprenticeship; trainees on government-funded training who are unpaid and / or not employed on a contract; trainee teachers; students on sandwich courses.

However, workers aged 22 or over, who are in the first 6 months of a new job with a new employer and are doing accredited training, are legally entitled to an hourly rate of at least £3.60 (not £4.20).

Graduated Pension
This was the form of earnings related pension that preceded SERPS and if you were employed between 1961 and 1975 you may be entitled to graduated pension.

About this Briefing - important
By its very nature this Briefing is just a short summary of the current legal position concerning the NMW. Therefore this document should not be relied upon as a complete and authoritative statement of the relevant law. For further information you should contact your local Union office. Also, affiliated Unions can seek assistance from the GFTU Research Service.

Is anyone at your workplace below the legal minimum wage?
To do a quick, approximate check as to whether or not a work colleague is below the National Minimum Wage (NMW), carefully go through the steps set out below. (Note that these steps are only for those who have set minimum hours of work and who don’t get accommodation from their employer).

Step 1: Is the particular worker covered by the NMW and, if so, does the £3.60 or £4.20 rate apply? (Use the front page of this Briefing to guide you. Also, note the following key points : the NMW applies whatever the size of the firm or business; the same minimum rates apply in every region of the UK).

Step 2: If the NMW applies, is the worker paid weekly or monthly or at some other frequency? If paid weekly, adopt a weekly basis when carrying out all the following steps. If paid monthly, work on a monthly basis. If paid at some other frequency, convert everything to weekly or monthly, whichever is easiest.

Step 3: Write down the worker’s current total gross pay for a normal basic week/month (that is the total pay now before deduction of income tax and national insurance, assuming no overtime, no sickness absence, no holidays and no maternity or other special leave). All normal and genuine elements of gross earnings, except overtime, should be counted in. For example, you should include average piecework pay and any other form of performance-related/merit pay. The following should also be included: any profit-related pay, any bonuses, any tips/gratuities provided that they are paid to the worker through the payroll.

Step 4: From the total gross pay resulting from step 3, deduct the weekly or monthly amounts of each of the following if they apply: the extra gross pay due purely to working unsocial hours/shifts (deduct the ‘premium’ element only), any special allowances (for example for doing special duties or for London weighting) provided they are not consolidated into standard pay, payments for work expenses, allowances for clothing/tools/travel/subsistence. If the total pay from step 3 includes the money value of any benefits in kind (for example subsidised meals, luncheon vouchers, car) then such money values should also be deducted. Call the figure resulting from all this ‘adjusted gross pay’.

Step 5: Locate the appropriate ‘approximate legal minimum’ pay figure in columns (2) to (5) of the Table given below. (If there is no row corresponding to the particular worker’s normal basic weekly hours, calculate the missing pay figure in the way indicated in the appropriate column heading). Is the ‘adjusted gross pay’ figure from step 4 greater, by a significant margin, than the appropriate pay minimum from the Table? If the answer is ‘no’ then the worker is possibly being underpaid. In other words, the employer could be breaking the NMW law.

Step 6: If the answer from step 5 is ‘no’, take prompt action as follows. Firstly, advise the affected worker not to contact the employer and not to throw away any recent payslips. Secondly, take photocopies of these pay slips. Thirdly, ring your Union’s local office for advice and/or ring the National Minimum Wage helpline on 0845 6000 678 (local ‘phone rates apply).

Visit these helpful NMW websites:-

www.dti.gov.uk/er/nmw/
www.tiger.gov.uk/nmw/

A much bigger NMW
Both the GFTU and the TUC support a much bigger NMW. The TUC wants the £4.20 rate to rise to between £5 and £5.30 an hour by October 2004.

Worker’s normal, basic, weekly working hours. (That is excluding all overtime and not counting time allowed for any meal breaks).(1)
Worker’s approximate* legal minimum gross weekly pay.

Worker’s approximate* legal minimum gross monthly pay.

Hours from (1) times £3.60 NMW.(2)
Hours from (1) times £4.20 NMW.(3)
Hours from (1) times £3.60 NMW, times 52/12.(4)
Hours from (1) times £4.20 NMW, times 52/12.(5)
15
£54.00
£63.00
£234.00
£273.00
20
£72.00
£84.00
£312.00
£364.00
25
£90.00
£105.00
£390.00
£455.00
30
£108.00
£126.00
£468.00
£546.00
37
£133.20
£155.40
£577.20
£673.40
39
£140.40
£163.80
£608.40
£709.80
40
£144.00
£168.00
£624.00
£728.00

* an exact calculation would be much more complicated & time-consuming


	Home\| News\| Feedback \| Links\| Help\| Search

		A service from The General Federation of Trade Unions Central House Upper Woburn Place London WC1H OHY