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National Minimum Wage (NMW): Key Card

Key Points

  • The National Minimum Wage Act was introduced with effect from 1st April 1999. The hourly rate depends on age and whether the worker is an apprentice.
  • The National Minimum Wages Regulations and amending Regulations have been consolidated into the National Minimum Wage Regulations 2015. Minor amendments were  made by The National Minimum Wage (Amendment) (No. 2) Regulations 2020
  • The Low Pay Commission recommends changes in the hourly rates.
  • The basic approach is to divide a worker's total remuneration which is to be taken into account (essentially "gross pay", including tax and national insurance but excluding benefits in kind) by the total number of hours in a pay reference period. 
  • The calculation varies according to time work, salaried hours work, output work and unmeasured work
  • Records have to be capable of being produced in a single document on request by the worker or enforcement agency and, from 2021, must be kept for 6 years but do not have to be in any particular form.
  • Apart from the statutory minimum wage there can be and are industry and other non-statutory (and thus non-enforceable unless agreed in relevant employment contracts) minimum wage arrangements, for example the Living wage (LLW).
  • Workers aged 25 and over became entitled from April 2016 to the National Living Wage (NLW) which is paid at a higher rate than the NMW.
  • From 2021, the NLW applies to those aged 23 and over.



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