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Draft National Minimum Wage (Amendment) Regulations 2018 Published

on Friday, 23 February 2018.

The draft Regulations propose an increase to the rates of National Minimum Wage (NMW) in accordance with recommendations from the Low Pay Commission.

According to the draft regulations, from 1 April 2018 the following hourly rates of NMW will apply: 

  • the national living wage (workers aged 25 and over) - £7.83
  • the standard adult rate (workers aged between 21 and 24) - £7.38

  • the development rate (workers aged between 18 and 20) - £5.90

  • the young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices) - £4.20

  • the rate for apprentices - £3.70

In addition, from 1 April 2018 the accommodation offset will be £7.00 each day.

Common Examples of Non-Compliance

There are a number of common scenarios where employers fall short of NMW:

  • employment status - often, where employment status is misclassified or where a worker is 'off-payroll' employers fail to pay the correct NMW
  • salaried staff - where relatively low paid salaried staff regularly work long hours, employers may fall short of NMW when taking into account the hours worked in relation to the rate of NMW
  • working hours - if a worker is required to arrive early or stay late for training, debriefing or staff meetings, these hours will constitute 'working time' therefore they should be paid at NMW
  • staff uniforms - making staff pay for their own uniforms out of their salary causing their pay to fall below the NMW

How to Avoid Falling Foul of NMW

Employers have a legal duty to ensure that workers are paid the NMW where applicable. We recommend that employers conduct a review of their existing salaried staff to ensure that they are paid  in excess of the NMW. Employers should review the hours actually worked by each of their employees, with reference to their salary and the applicable hourly rate of NMW to ensure that they are compliant.

Finally, employers should be aware that if they do fall below NMW Regulations, they risk being publically 'named and shamed' by the government for NMW failures that amount to more than £100. This could result in long lasting reputational damage.

For more information please contact Eleanor Boyd in our Employment law team on 020 7665 0940.

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