National Minimum Wage Act 1998

Question 1

What is the National Minimum Wage Act 1998?

Answer 1

Under the National Minimum Wage Act 1998 all workers in the UK are entitled to a statutory national minimum wage. This applies to all sectors of the economy and all companies regardless of their size.

The legislation covers all workers employed under a contract.

The contract does not need to be a contract of employment and doe

Question 2

What are the current rates?

Answer 2

These rates are for the National Living Wage (for those aged 21 and over) and the National Minimum Wage (for those of at least school leaving age). The rates change on 1 April every year.

April 2024 (current rate)

21 & over £11.44
18-20 £8.60
Under 18 £6.40
Apprentice £6.40

Question 3

what penalties are imposed if an employer does not pay minimum wage?

Answer 3

Since 1 October 2013, the government will name all employers that have been issued with a Notice of Underpayment by HMRC unless there are very exceptional cases. This notice sets out the owed wages to be paid by the employer together with the penalty for not complying with minimum wage law.

If HMRC finds that the employer has not paid the minimum wage, action they can take against the employer includes:

1) issuing a notice to pay money owed, going back a maximum of 6 years.
2) issuing a fine of up to £20,000 and a minimum of £100 for each employee or worker affected, even if the underpayment is worth less.

Both the National Minimum Wage Act 1998 and the penalties against employers who breach the Act aim to protect workers.