Tax & Accounting News

National Minimum Wage

01/10/2008

A reminder has gone out to employers that new national minimum wage rates apply from 1 October 2008.

The national minimum wage legally applies to virtually all workers above the compulsory school leaving age, including home workers, part-time employees, overseas workers, casual workers, agency workers and people on short-term contracts.

The new hourly rates, which apply to pay reference periods beginning on or after 1 October 2008, are:

• £5.73 an hour to adult workers aged 22 and above
• £4.77 an hour to workers aged 18-21
• £3.53 an hour to workers aged below 18 who are no longer of compulsory school age. Apprentices aged 16-17 are exempt from this rate.

Employers are also reminded that the only time they can make deductions that take wages below the national minimum wage is for living accommodation that they provide. From 1 October, the maximum deduction for this is £4.46 per day for each day that the accommodation is provided.

HM Revenue & Customs are responsible for the enforcement of the national minimum wage and can arrange to view employer records at any time to ensure that the correct rates are being paid. Failure or deliberate neglect to pay the appropriate rates can lead to fines or even criminal prosecution.