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4. Rights to pay and conditions
[ch 4: pages 91-92]Under the National Minimum Wage Act 1998, workers have the right to a minimum wage. The detail of the law is found in the National Minimum Wage Regulations 2015 (NMWR15). These regulations consolidate all the regulations enacted to deal with the National Minimum Wage (NMW) since its introduction in 1999.
Here are the NMW rates in force from 1 April 2019:
• £8.21 an hour for workers aged 25 and older (the government calls this the “national living wage”);
• £7.70 an hour for workers aged 21 to 24;
• £6.15 an hour for workers aged 18 to 20 (called the “youth development rate”); and
• £4.35 an hour for workers aged 16 to 17.
The NMW rate is reviewed each year in April.
Although called the “national living wage”, the government’s hourly rate for workers aged 25 or older, launched on 1 April 2016, is simply an extra age tier, added to the existing NMW regime. References in this booklet to the “National Minimum Wage” include the statutory national living wage rate.
There is also a separate apprenticeship rate for apprentices aged 16 to 18 and those aged 19 or over in their first year of apprenticeship (after which the normal age band rates set out above apply). From 1 April 2019, the apprenticeship rate is £3.90 an hour. For an employer to be allowed to pay the apprenticeship rate without breaking NMW wage law, there must be a valid Apprenticeship Agreement in place, complying with minimum statutory standards and providing training for a transferable qualification (see Chapter 2, page 49: Apprentices).
An employer providing accommodation can count some of its value towards the NMW: up to £7.55 per day, or £52.85 per week (from 1 April 2019), known as the accommodation offset. Guidance is available online at: www.gov.uk/national-minimum-wage-accommodation.
The Living Wage Foundation
The government’s national living wage for workers aged 25 and older must not be confused with the voluntary living wage rate set each year by the Living Wage Foundation and the Greater London mayor, based on an independent assessment of the amount needed to get by. The current rate (from November 2018) is £9.00 an hour outside London and £10.55 an hour in London, which has a higher cost of living. It applies to all workers aged over 18. Revised rates are announced each year in November in Living Wage Week.
To date, around 4,920 employers have agreed to pay this higher rate. There is more information on the Living Wage Foundation website: www.livingwage.org.uk. Employers who commit to pay the voluntary living wage are expected to implement the rate as soon as possible and at least within six months, so that all employees receive the new rate by 1 May of the following year.
In Wales, the National Assembly and Welsh Government were among the first to pay it, from December 2012. In Scotland, the Scottish Government’s Public Sector Pay Policy for Staff Pay Remits states that every worker whose pay is controlled directly by the Scottish Government should receive at least the Scottish Living Wage, which is applied as an annualised rate. For 2018-19 pay remits, the Scottish Living Wage is set at an annual gross salary of £16,900. The Scottish government also uses public procurement to encourage contractors to pay the voluntary living wage rate.