Have you been caught short from the National Minimum Wage (NMW) and National Living Wage (NLW) increase?

In February this year the Government announced the annual NMW and NLW increase for 2020 to take effect from April. Since we are now past April, the new rates are both in full force!

Have you checked your pay cheques since April to ensure that you are earning the NMW and NLW specified by the Government? We would love to help you with this, just keep reading for more information and for our advice on what to do if you have been underpaid!

Firstly, you may be reading this and thinking what is the NMW and NLW, I’ve never heard of these before! To be honest, there isn’t any difference between them other than the legal age brackets! So what is the NLW? It is a NMW for anyone over the age of 25. It is the minimum hourly salary that anyone over the age of 25 is legally able to earn, whereas workers must be at least school leaving age to get the NMW.

So why is there a NLW?

Simply to enable people over the age of 25, working 40 hours per week with no additional income, the ability to afford basic expenses, such as, food, utilities, transport and childcare.

You may be reading this, thinking I’m under the age of 25, why am I not entitled to the NLW? This is to protect your employment! Think about this… if a new worker that needs to gain industry experience and skills costs the same amount to employ as a worker that has industry experience and relevant skills, the employer will probably select the experienced and skilled worker. The knock-on effect is that there would be a high rise of unemployment for workers under the age of 25 and a generation of unskilled and inexperienced workers which may damage the economy in years to come. The NMW protects the employment for workers under the age of 25.

So what is the NMW for 2020?

The NMW rates of pay differs depending on your age. If you are 25 and over, the rate of pay is £8.72 per hour, between the ages of 21 and 24 £8.20 per hour, between the ages of 18 and 20 £6.45 per hour and if you are under the age of 17 the rate of pay is £4.55 per hour. The rate of pay for apprentices is £4.15 per hour and apprentices qualify for this rate of pay if either they are under the age of 19 or if they are aged 19 or over and they are in the first year of their apprenticeship. If an apprentice is aged 19 or over, or has completed the first year of their apprenticeship, then they are entitled to the NMW.

Do you know if you are you earning the NMW for your age?

The Government have produced a handy calculator for you to use to check whether you are getting paid the NLM, NMW or whether your employer owes you any money from underpayments. Take a look at the calculator here –  https://www.gov.uk/am-i-getting-minimum-wage.

You may be reading this thinking that you work part time, not full time, are you entitled to the NMW and NLW? YES! Whether you work full time, part time or on a zero-hour contract, you are legally entitled to the NMW and NLW.

Are you reading this concerned as you have recently signed a contract but your salary is below the NMW and NLW? Contracts for payments below the NMW are not legally binding as everyone is legally entitled to the NMW and NLW. We would recommend speaking to your prospective employer in the first instance if you have noticed a discrepancy.

What should you do if you are not being paid the NMW or NLW?

Firstly, speak to your employer! Your employer is legally obliged to pay you the difference between what you have been paid and what they should have legally paid you! We would recommend that you speak with either the Payroll or HR department and ask them to explain how they have calculated your pay so that you can verify these calculations before you challenge the underpayment.

If your employer confirms that you have been underpaid, they must pay any arrears immediately as it is a criminal offence for employers to not pay an employee the NMW or NLW.

What should you do if your employer won’t pay you the underpayment of the NMW or NLW?

If you have been unsuccessful in receiving the payment from your employer, contact ACAS (Advisory, Conciliation and Arbitration Service). ACAS is a free of charge service and they can be contacted via their helpline on 0300 123 1110. ACAS will be able to verify your calculations and will be able to talk you through your options. Employees are also able to make a complaint to HMRC (HM Revenue and Customs) about their employer, however we would recommend that you approach ACAS in the first instance.