Source: HeatingAndVentilating.net - http://www.heatingandventilating.net/
While politicians and experts debate the perceived pros and cons of notional big hitters in the banking sector receiving bonuses, spare a thought for workers at the other end of the pay scale, insists Fergal Dowling, head of employment law at Irwin Mitchell.
At the start of this month, the National Minimum Wage (NMW) rose from £5.73/hr to £5.80. The hourly rate of employees from 18 to 21, known as the National Minimum Wage development rate, went from £4.77 to £4.83, a 1.3% increase.
Meanwhile, the youth hourly rate - for 16 to 17-year olds - rose to £3.57 from £3.53. The government has declared that, from October 2010, workers who are aged 21 will be entitled to the adult rate of the National Minimum Wage.
Launched in 1999, the National Minimum Wage was first set at £3.60/hr. It is reviewed each year, and any changes to the rates are applied on October 1. This year's increase was the lowest since the introduction of the NMW but, as the Low Pay Commission (LPC) - which makes recommendations on the NMW rate - points out, the UK faces economic challenges.
Employee representatives, who fully appreciate the issues, expect to see a significant increase in 2010.
The majority of employees over school leaving age working legally in the UK (excluding the Channel Islands and the Isle of Man), are neither self-employed nor voluntary workers, and have a written, oral or implied contract are entitled to be paid at least the NMW.
Employers must apply the appropriate NMW figure to an employee's basic wage. It is prohibited to arrive at the NMW by including money paid to employees for overtime, as a bonus or shift allowance. Employers who make deductions from employees to cover the cost of items such as corporate work-wear must ensure that the employees still receive at least the NMW following those deductions. Any contract which cites a rate of remuneration lower than the NMW has no legality on the pay front, even if the worker entered into the agreement on a voluntary basis.
Bosses must keep records demonstrating compliance with the NMW or risk a fine. These must be kept for a minimum of three years after the current year's pay records, although six years may be more sensible as employers can face legal action for failure to pay the NMW up to six years after the alleged offence.
The records may be called upon as evidence of compliance in the event of a dispute or if requested for inspection by an HMRC minimum wage compliance officer or by members of the workforce.