The Importance of Paying The National Minimum Wage

If your business doesn't pay National Minimum Wage, you can face financial penalties.

author

James Rowland

Commercial Director James leads Account Management, Sales and Marketing at Neathouse Partners.

Date

16 October 2019

Updated

17 July 2024
1 min read

The National Minimum Wage sets out the lowest hourly rate that you are allowed to pay your workers.

The exact amount varies by both the age and status of the worker and is designed to ensure workers are paid a reasonable amount for their work.

It has been the law that employers must pay a minimum wage since 1999, when it was set at £3.60 for adults.

Following the law and ensuring you pay the minimum wage is vital if you don't want to face large financial penalties.

As well as giving notice of arrears and issuing penalties, HMRC can also take employers to the civil court for not paying the National Minimum Wage.

About The National Minimum Wage

The National Minimum Wage is set each year in the Government's budget. There are different rates for workers under the age of 18, aged 18-20, 21-24 and 25 and over.

There is also a separate minimum wage for apprentices if they are either aged under 19 or are 19 or over and in the first year of their apprenticeship.

The minimum wage for those aged 25 and over is referred to as the National Living Wage.

Workers do not need to be permanently employed to receive the NMW. It applies to casual workers, agency workers, trainers, and more.

However, it doesn't apply to self-employed people, volunteers, and a number of other types of worker.

Paying National Minimum Wage Is the Law

Any business owner that wants to be law-abiding needs to pay the National Minimum Wage.

It has been the law for 20 years, and has risen over the years to keep up with the rate of inflation. 

It is one of the number of duties that an employer has, along with paying employer's National Insurance, among other things.

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