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National Minimum Wage Act 1998

UK Labor Law

National Minimum Wage Act 1998

The National Minimum Wage Act 1998

Since April 1999 all workers in the UK have been entitled to a statutory national minimum wage ("NMW"). This covers all sectors of the economy, and all companies regardless of their size. This guide summarises the legislation (The National Minimum Wage Act 1998). What employers need to know:

who must be paid the NMW the rate which is applicable the pay reference period

which payments are and are not included which hours count

how to calculate the hourly rate of pay which records need to be kept penalties for failure to comply

Who must be paid the NMW?

The legislation covers all workers employed under a contract. The contract does not need to be a contract of employment and does not need to be in writing; it may be an implied contract or an oral contract. A worker is someone who undertakes personally to perform work or services for someone else, who is not genuinely self-employed, and who has ceased to be of compulsory school age.

It includes agency workers, homeworkers, casual labourers, part-time workers, agricultural workers*, pieceworkers, commission workers, crown servants and workers on UK registered ships unless employed wholly outside the UK or who are not ordinarily resident in the UK. It excludes share fishermen/women, genuine volunteers, residential members of a religious or charitable community, members of the family working in a family business, au pairs, members of the armed forces and prisoners.

The rate which is applicable

Age

16-17 18-21 22 & over

Current NMW

£3.40 £4.60 £5.52

NMW October 2008

£3.53

£4.77

£5.73

* the provisions relating to agricultural workers are contained in the Agricultural Wages Act 1948

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