Are you getting enough? Minimum and Living Wages explained

Published: 11/05/2016

If you are 16 or over and work then you are entitled to either the National Minimum Wage or National Living Wage. But which one and how much should you be getting? Our latest guide takes you through the recently changes to minimum wages and what to do if you’re not being paid the right amount.

As of 1st April 2016 a new national minimum wage – the National Living Wage – was introduced to all eligible workers aged 25 and over. The current rate is £7.20.

If you are under 25 years old, you are entitled to the National Minimum Wage; the amount of which is dependent on your age.

Age 25 or over National Living Wage £7.20*
Age 21 – 24 National Minimum Wage £6.70*
Age 18-20 National Minimum Wage £5.30*
Age 16-17 National Minimum Wage £3.87*
Apprentices aged 16-18 or first year apprentices if you’re 19 or over National Minimum Wage £3.30*

*Hourly rate before tax

Exceptions to the rule?

You are not entitled to either the national living or minimum wages if you are:

  • Self employed
  • Under 16
  • In the armed forces
  • A volunteer or doing work experience
  • An au pair living with a family and not paying towards your accommodation or food
  • In prison.

Doing the maths

If you are on a salary it’s important to check you are receiving the correct national minimum wage. You can work out your hourly rate by using the National Minimum Wage calculator. The calculator will also tell you how much your employer owes you (if they have failed to pay to the correct minimum wage).

It is a criminal offence for employers to fail to pay employees the national minimum wage. The size of the business has no bearing on this, nor does the length of time the business has been operational.

If you are being paid less than the national minimum wage then you should speak to your employer immediately – it might be a genuine mistake (e.g. they did not know you had switched age bracket). You could print out your calculations, confirming what you are being paid, what you be paid and how much your employee owes you.

Some employers might offer perks or benefits instead of reimbursing you what you are owed. You should decline these offers and ask for the wage instead.

If the employer doesn’t pay…

Contact Advisory, Conciliation and Arbitration Service (Acas) and get them to confirm whether you’re entitled to the minimum wage. If you are they will help you work out what to do next.

Typically you will need to raise a grievance. Your employer may have a formal grievance procedure in place. If they do, follow that but if they don’t you can raise a grievance by simply writing a letter to your employer.

If this does not resolve the problem you can take your employer to an employment tribunal. In order to do so however you have to notify first Acas who will look for ways to resolve the problem without going to a tribunal. This usually involves ‘Early Conciliation’. This is a free and confidential process and can help settle the case quicker without having to go to court. You don’t need to go through early conciliation but you cannot present a claim to an employment tribunal before lodging a complaint via Acas.

You can get the process started by completing the Early Conciliation form on the Acas website.

The last resort

If your employer is still refusing to pay you what you are owed or the correct wage you can take them to an employment tribunal.

Employment tribunal claims have a very strict, and relatively short, time limit. In most cases you make submit an application to an employment tribunal within three months minus one day of the date when you first raised the issue. Be aware you may have to pay a fee, the cost of which depends on your type of case and personal circumstances. Once you make a claim:

  • Employer needs to give their side of the case, in writing, within 28 days of receiving your claim form
  • The tribunal will then decide if there will a full hearing (you may be asked to go to a preliminary hearing)
  • Arrange documents and organise any witnesses
  • Present your case. You can do this yourself or get someone to do so on your behalf (lawyer, friend or family member).
  • The decision will be sent in the post although in some cases you may be given the decision at the hearing.

Successful claims

If your claim is successful, the tribunal can order your employer to:

  • Pay you compensation
  • Pay any tribunal fees and witness expenses you’ve paid
  • Improve your working conditions (i.e. increase your pay)
  • Give you your job back, if appropriate.

Reporting your employer

If your employer has refused to pay you the minimum wage then you should report them to HM Revenue and Customs, regardless if you pursue a claim against them or not. They are not obliged to investigate your employer and it could take a long time so you shouldn’t rely on this route to get your money back (unless you have surpassed the deadline for a tribunal) but it is still important to do your bit and alert the proper authorities.

Content correct at time of publication

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