10 questions and answers on the National Minimum wage

What is the national minimum wage?

The National Minimum Wage (NMW) sets the minimum hourly rates that employers must legally pay workers in the UK.

How much is the national minimum wage?

NMW levels vary, depending on your age and whether you are an apprentice. It is reviewed every year, with changes introduced every April. Since April 2022, the hourly national minimum wage rates are:

• £9.50 for workers aged 23 and above;
• £9.18 for workers aged 21-22;
• £6.83 for workers aged 18-20;
• £4.81 for workers aged 16-17;
• £4.81 for apprentices under 19, or in the first year of their apprenticeship.

Who is eligible for the national minimum wage?

Employers must by law pay at least the national minimum wage to workers. This is a day one employment right and you don’t need any qualifying service to be entitled to this rate. Even if you agree to work for less or your contract says you are entitled to less, you cannot contact out of this right and therefore you could have a claim irrespective of what your contract says. 

What should your employer do about the NMW? 

It’s against the law for an employer to pay less than the NMW. If an employer has not been paying the correct minimum wage, they should resolve the problem as soon as possible. Your employer must also resolve any backdated non-payment of minimum wage. This is the case even if you no longer work for your employer.

Employers must also keep certain records showing the hours worked and payments made to workers. The records must be made available for inspection by workers or HMRC enforcement officers. 

If your employer isn’t paying you the NMW, what should you do next? 

If the minimum wage is not being paid by your employer you could raise a grievance, which is a formal complaint. If your employer doesn’t deal with the problem, then you have two further options to explore. You can complain to HM Revenue and Customers (HMRC) or bring a complaint in the Employment Tribunal. But you cannot do both.

What can HMRC do to help me?

You can make a complaint to HMRC and this can be anonymous. The HMRC have enforcement powers and they can take action against an employer who is in breach of the NMW. The HMRC has the following powers:

• They can issue a notice to your employer to pay money owed and they can go back up to 6 years.
• They can fine an employer in breach of the NMW up to £20,000. Those fines can be in excess of the underpayment. 
• They can take legal action including criminal legal proceedings
• They can notify the Department for Business, Energy and Industrial Strategy (BEIS) who may put an employer found to be in breach on a public list. in effect to publically name and shame the employer. Large employers, such as Waterstones, Schuh, House of Fraser and Matalan have recently appeared on the list, often due to ‘technical’ breaches of the rules.

Can I bring a claim in the Employment Tribunal? 

You can claim for non-payment of the minimum wage. A claim is limited to the last 2 years. You must also remember to bring the claim within the time limit which is 3 months minus 1 day from the date of the last underpayment of the minimum wage. You may also be able to bring a breach of contract claim, which would allow claiming back up to 6 years.  

You can also bring a claim for unfair dismissal or detriment (see below for further information).

Can I bring a claim if my employer treats me unfairly?

You could bring a claim in the Employment Tribunal if you are treated unfairly in the following circumstances: 

• If you assert your right to the minimum wage, for example by making a grievance with your employer about not being paid the NMW.
• If you make a complaint to HMRC or a claim to an Employment Tribunal about non-payment of the NMW.
• If you become entitled to the higher rate of minimum wage (for example if you become a year older, for example attaining the age of 23 and therefore becoming entitled to the highest rate of NMW) and are treated unfairly as a result.

This type of claim is known as a ‘detriment’ claim and the purpose of this claim is to provide you with redress in circumstances where you are treated unfairly by your employer. 

What is a ‘detriment’? 

A ‘detriment’ means treatment that leaves you worse off, some examples could be: 

• Your employer overlooking you for promotions.
• Your employer saying no to training requests without good reason.
• Your employer reducing your hours of work. 

If you are successful with a claim for detriment, the Employment Tribunal can award compensation that it considers ‘just and equitable’ in the circumstances.

Can I bring a claim if I’m dismissed for complaining about not receiving the NMW? 

If you are dismissed for making a complaint about not receiving the NMW you can bring a claim for what is known as ‘automatic’ unfair dismissal. You don’t need any qualifying service to bring this claim, this is ‘day one’ employment right. 

If you would like further assistance with any questions about the National Minimum Wage, please contact the Employment Department on 01302 341414 or 0114 272 1884 or fill out our online enquiry form.