In a matter of weeks, millions of low-income workers will experience a pay rise as the minimum wage is set to increase. The minimum wage represents the lowest hourly rate that employers are legally obliged to pay their employees, irrespective of whether they work on a full-time or part-time basis.
While many employers opt to pay more than the minimum wage, Chancellor Rachel Reeves confirmed in her Autumn Budget last October that the minimum wage would see a 6.7% increase from April 1. Government estimates suggest this will result in an additional £1,400 per year for a full-time worker earning the main minimum wage, reports the Mirror.
However, the exact amount will differ based on the number of hours worked:
- 21 and over: £11.44 an hour to £12.21 an hour
- 18 to 20: £8.60 an hour to £10 an hour
- Under 18: £6.40 an hour to £7.55 an hour
- Apprentice: £6.40 an hour to £7.55 an hour
Last year, Ms Reeves declared: “This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”
Deputy PM Angela Rayner echoed these sentiments, stating: “A proper day’s work deserves a proper day’s pay. Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record.”
The National Living Wage applies to those aged 21 and over, while the National Minimum Wage is for those under 21. Both are set to see an increase from this April.
However, certain individuals such as self-employed people, volunteers, and company directors are not covered by minimum wage regulations. Some companies choose to pay the Real Living Wage, a voluntary rate that takes into account living costs and is higher than the statutory minimum wage.
Over 15,000 employers, including Aviva, Everton FC, Ikea, Burberry and Lush, adhere to the Real Living Wage. The rate is set to rise to £12.60 per hour outside London and £13.85 within the capital.
These new rates must be implemented by May 2025. To qualify, you must be over 18 and your employer needs to be part of the Real Living Wage scheme.
If you suspect you’re being underpaid, remember that you’re legally entitled to at least the minimum wage. Start by checking your payslips if you think you’re not receiving this.
GOV.UK offers a minimum wage calculator to help determine if you’ve been underpaid. If it seems you’re not earning at least the minimum wage, approach your employer first to rectify the situation.
If the problem persists, it’s advised to contact the Advisory, Conciliation and Arbitration Service (ACAS), an independent UK government entity, for additional assistance. ACAS offers support through their pay and work rights helpline at 0300 123 1100.
In cases where further escalation is necessary, you have the right to take your employer to a tribunal, although this should be considered a last resort. Securing expert guidance before engaging in such drastic measures is crucial; you can seek advice from bodies like ACAS or Citizens Advice regarding any potential costs involved.
Furthermore, if there’s a possibility that your employer is not complying with minimum wage laws, you are entitled to report them to HM Revenue & Customs (HMRC). HMRC will then decide if there’s cause for an investigation.
If your employer is found to be underpaying, they may be subject to penalties.
HMRC also holds the authority to bring legal action against your employer in court should they continue to default on payments. Per ACAS policy, you have two options: initiate a tribunal case yourself or lodge a complaint with HMRC.
Yet, it’s important to remember, as per ACAS’s website, “You cannot take the same issue through two legal processes.”
There are time restrictions for filing claims; for individual instances of underpayment or non-payment, you must submit a claim to an employment tribunal within three months less one day from when the payment was due. For continuous incorrect underpayments or non-payments, the countdown begins from the date of the most recent missed deduction and adheres to the same three-month-minus-one-day timeframe.
