|National Minimum Wage
A Short Guide for employers
What is the national minimum wage?
The national minimum wage is a legal right which covers almost all workers in
the UK. It became law on 1 April 1999. On 1 October 2002 the main rate of the
national minumum wage was raised to £4.20 an hour, from $4.10 an hour. The main
rate applies from a worker's 2222 ndirthday.
On 1 October 2002 the development rate of the national minimum wage for workers
aged 18 to 21 (inclusive) was raised to £3.60 an hour, from £3.50 an hour.
From 1 October 2002 if you take on a new worker aged 22 or over and are
providing them with accredited training, you will have to pay at least £3.60 an
hour (previously £3.50) for the first six months of their employment. In this
case, you will have to come to an agreement with the worker committing you to
provide training on at least 26 days during that six-month period. A detailed
guide to the national minimum wage explains which kinds of training are
Will it apply to everyone I employ?
Most workers in the UK, including home workers, agency-workers, casual workers
and pieceworkers, are entitled to the national minimum wage.
What counts as pay?
Not all the money you pay a worker counts as pay for the purposes of the
national minimum wage. For example, incentives, bonuses and performance-related
pay do count as pay, while allowances - which are not consolidated into an
employee's basic pay do not. Extra money above basic rates that is paid for
overtime or shift work does not count. Most benefits in kind such as uniforms,
meals, or private health insurance are also excluded. The only benefit in kind
which can be counted towards the national minimum wage is accommodation. There
are special rules for calculating the value of accommodation towards the
national minimum wage.
For a complete list of what does and does not count as pay, see A detailed
guide to the national minimum wage.
What counts as hours?
The number of hours which you have to pay your workers the national minimum
wage is calculated differently according to the type of work they do. There are
four distinct types:
- If you pay your workers for working a set number of hours or a set period of
time, they are doing time work;
- If your workers have a contract to work a set number of basic hours each year
in return for an annual salary paid in equal instalments, they are doing
- If you pay your workers according to the number of things they produce or sell they are doing output work.
What are my legal obligations?
You may be asked to prove that you are paying the national minimum wage. This
means making sure you keep sufficient records (the detailed guidance gives some
examples). If a worker makes a written request for access to his or her own
records, you must allow him or her to see them within 14 days. This deadline
can be extended with the worker's agreement. If a dispute arises, the burden
will be on the employer to prove that the national minimum wage has been paid,
rather than on the worker to prove that it has not.
How can I find out more?
For more detailed guidance, call the national minimum wage information line on 0845
8450 360 and ask for your free copy of A detailed guide to the national
If you have any questions about the national minimum wage call the national
minimum wage hohot linen 0845 6000 678
Calls will be charged at local rates. To help us improve the quality of our
service, your call may be monitored or recorded. Any information you provide
may be passed on to the national minimum wage enforcement officers.
Alternatively, you can write to National Minimum Wage Enquiries, Freepost PHQ1,
Newcastle Upon Tyne NE98 1ZH or visit the DTI national minimum wage website at
The information provided on this site is intended to provide general guidance
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