National Minimum Wage - Expert Comments

Just Employment Law
3rd Sep 2008

The annual increase in National Minimum Wage, (NMW) announced by the government earlier this year, are you paying enough?

UK Money

The annual increase in National Minimum Wage, (NMW) announced by the government earlier this year, are you paying enough?

The annual increase in National Minimum Wage, (NMW) announced by the government earlier this year, comes into force from 1 October 2008.

  • The adult rate will rise from £5.52 to £5.73
  • The rate for 18-21 year olds will also increase from £4.60 to £4.77
  • The 16-17 year old rate will rise from £3.40 to £3.53

 

What do I need to do?

 

Check that your business has been paying the correct rate for each employee and that it has been up-rated at the right time each year. A little time and/or money spent on having your accountant or bookkeeper go through the books could save you money in the long run, not to mention a criminal record! To be on the safe side pay any identified underpayments at the current rate and if you do this check this month and identify any underpayment you can make up for it at the 2007/8 rate rather than the 2008/9 rate if you pay the arrears before 1 October.

 

Be aware that your business could fall foul of the regulations if you have a system where employees bank overtime to be taken as time off in lieu or as part of a flexi scheme to make up wages during short time working. Say, for example, you pay workers £6 per hour. Weekly workers must be paid the NMW for the hours they work in that week. The employee works 48 hours and ‘banks’ 8 hours. You pay £240 gross, the employee is due 48 x £5.52 = £264.96. You have underpaid by £24.96.

Share this with