The National Minimum Wage (NMW) and the National Living Wage (NLW) have undergone significant increases this year and last.
For the first time, the NLW was extended in April 2024 to 21- and 22-year-olds, rising to £11.44 per hour. For those between 18 and 21, the NMW was set at £8.60, and at £6.40 for apprentices and those under 18.
Following the 2024 Autumn Budget, these rates are set to rise again to:
All employers must pay workers at least the appropriate rate of NMW/NLW. This is a legal requirement unless you work in a specific circumstance, such as being self-employed.
If you are concerned that you are not being paid at the minimum legal level, it is important that you address this with your employer.
Checking your pay
When the NLW and NMW increase, your employer is responsible for updating their payroll accordingly from the date the rise is implemented.
If you think you are not being paid correctly, initially raise the issue with your employer – using your pay slip as evidence.
You are entitled to the appropriate minimum wage level whether you are paid by salary or hourly pay.
It can be more complex to work out your entitlement if you are paid via a salary, but it is important you do so as this is where underpayment often slips under the radar.
Calculate your hourly pay with the basic annual hours outlined in your contract and divide this by the number of pay periods per year – typically 12 if you are paid monthly.
You can then divide this figure by the amount in each pay packet, giving you your hourly rate.
For example, if your annual hours are 1,950 (around 37.5 hours per week), you work an average of 162.5 hours per month.
Divide a pay packet of £1,600 (pre-tax) by the figure and the hourly rate works out at £9.85 per hour.
This is now below the NLW and will soon be below the NMW for over 18s as well – but the difficulty is that, not long ago, this was an acceptable wage.
If you started a role at a certain salary, it is important that you review it regularly to ensure that you continue to receive the wage to which you are entitled.
Escalating a dispute
Many difficulties with being paid at the correct rate arise from error or changes in legislation.
However, if your employer still refuses to pay you according to your entitlement, you can make a complaint to HM Revenue & Customs (HMRC).
HMRC can send your employer a notice to pay you correctly in addition to providing you with any arrears, in addition to a fine.
HMRC can also take your employer to Court on your behalf if the dispute cannot be resolved, or you can go directly to the Employment Tribunal yourself.
You cannot be dismissed for asking to be paid at the NLW or NMW. If you are, you may be able to claim for unfair dismissal.
Contact our team for further advice and support on your wages.
