National Minimum Wage

Employees and workers are entitled to payment of a minimum wage from their employer for each hour worked.

The national minimum wage rate for employees and workers aged 25 and over is currently £8.21 an hour, and £8.72 an hour from April 2020. Lower rates are payable for employees and workers aged between 18 and 24.

To calculate whether the national minimum wage has been paid, the total remuneration received in the calculation period must be ascertained. Tips and gratuities received are excluded from the total pay received. Deductions or payments made by an employee or worker to their employer for goods or services contractually imposed in connection with the employment may be deducted from the total pay received. Deductions or payments made by a worker for expenditure in connection with their employment may also be deducted from the total pay received. Determining whether the national minimum wage was paid is calculated by ascertaining the total pay received (excluding tips and gratuities), minus deductions or payments made to their employer for goods or services contractually imposed in connection with the employment, minus deductions or payments made by a worker for expenditure in connection with their employment, divided by the number of hours worked in the calculation period. If the resultant figure is less than the national minimum wage, then the employee/worker is entitled to recover payment of the shortfall of the national minimum wage from the employer.

For example, calculating whether the national minimum wage was paid to an employee or worker who worked 40 hours in a week, received £350 pay, and incurred expenditure of £100 in connection with their employment is as follows:

£350 earnings minus £100 expenditure divided by 40 hours worked = pay of £6.25 an hour. As £6.25 is below the national minimum wage of £8.21 an hour, the employee or worker is entitled to recover the shortfall between the pay received and the national minimum. In this example, the shortfall is calculated as the national minimum wage of £8.21 minus the hourly pay of £6.25 received = £1.96. This example covers a pay reference period of 1 week only, but the calculation should be made covering the entire period concerned.

It is a criminal offence for an employer to refuse or wilfully neglect to pay its workers the national minimum wage.

Where the employment status of a private hire driver or courier is misclassified as self-employed, the driver or courier should notify their employer of the misclassification of employment status, and request that their national minimum wage entitlement is remedied. If the dispute remains unresolved, the driver or courier should refer the matter to ACAS and invoke the Early Conciliation process. Thereafter, if the matter remains unresolved, the driver or courier should consider filing an employment tribunal claim for the matter to be determined.

Private hire drivers and couriers may obtain assistance and representation in pursuing national minimum wage disputes from a solicitor, law centre or trade union.