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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
  • 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 must be kept for 3 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 are entitled from April 2016 to the National Living Wage (NLW) which is paid at a higher rate than the NMW. 



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