The Rise in National Minimum Wage for 2018 image

The Rise in National Minimum Wage for 2018

MANAGING STAFF

10th April 2018

The National Minimum Wage was first introduced in the UK in 1999, and is the minimum that an employer can pay to staff below the age of 25 (with the National Living Wage covering employees over the age of 25). The rate that a person is entitled to will depend on their age and whether they are employed as an apprentice.

Who is Entitled to National Minimum Wage?

To qualify for National Minimum Wage, you must be at or above school leaving age (16 years or older). Apprentices are entitled to their own rate of National Minimum Wage if they are either under the age of 19, or are 19 or older and in the first year of their apprenticeship. After the first year of their apprenticeship, any apprentice over the age of 19 is then entitled to the minimum wage rate for their age bracket.

Are There Any Exemptions to Who is Entitled to National Minimum Wage?

 While the National Minimum Wage and National Living Wage work in favour of low earners, not everyone is entitled to these rates.
The following people do not qualify to receive a minimum wage rate:

  • The self-employed
  • Volunteers
  • Company directors
  • Members of the Armed Forces
  • Work experience students (depending on the length of their placement)

All other workers who do not fall into these categories must be paid the appropriate rate of National Minimum Wage or National Living Wage or above.

How National Minimum Wage Rates Have Changed Over the Years

Since it’s inception in 1999, the rates and age brackets stipulated under the National Minimum wage have changed somewhat.
Year              21+                18-20               -18               
1999              £3.60              £3.00                  –
2000              £3.70              £3.20                  –
2001              £4.10              £3.50                  –
2002              £4.20              £3.60                  –
2003              £4.50              £3.80                  –
2004              £4.85              £4.10                  –
2005              £5.05              £4.25              £3.00
2006              £5.35              £4.45              £3.00
2007              £5.52              £4.60              £3.30
2008              £5.73              £4.77              £3.40
2009              £5.80              £4.83              £3.57

Year               22+                18-21              -18                 Apprentice
2010               £5.93              £4.92              £3.64                  £2.50
2011               £6.08              £4.98              £3.68                  £2.60
2012               £6.19              £4.98              £3.68                  £2.65
2013               £6.31              £5.03              £3.72                  £2.68
2014               £6.50              £5.13              £3.79                  £2.73
2015               £6.70              £5.30              £3.87                  £3.30

Year               25+                21-24              18-20              -18                 Apprentice
2016               £7.20              £6.95              £5.55              £4.00                  £3.40

While the National Living Wage was initially set at £7.20 an hour when it was introduced in 2016, it is expected to reach a rate of £9 an hour by 2020.

National Minimum Wages Rates for 2018

According to the Low Pay Commission (who is the body that sets the rates), 2018 will see the biggest increase of the National Minimum Wage rates in a decade for 18-20 and 21-24 year olds, with a rise of 4.7% and 5.4% respectively.
As of 1st April 2018, the National Minimum Wage will be adjusted as per the following:
Year               25+                21-24              18-20              -18                 Apprentice  
April 17           £7.50              £7.05              £5.60              £4.05                  £3.50
April 18         £7.83              £7.38              £5.90              £4.20                  £3.70

What if an Employer Fails to Pay the National Minimum Wage?

Both the National Minimum Wage and National Living Wage are a legal requirement, and failing to meet them could result in the employer being fined.
If an employee feels that they are not being paid the correct wage according to the law, they must informally raise the issue with their employer. However, if this does not generate any action, the employee can raise a formal written complaint or grievance. In cases where the matter cannot be resolved internally, the employee should proceed by lodging a complaint to an Employment Tribunal.
Alternatively, a complaint can be made via HMRC who will investigate the matter.
A complaint must be made to either an Employment Tribunal or to HMRC. This cannot be done for both.

Want to Find out More About National Minimum Wage?

For more information on the National Minimum and Living Wage, visit the ACAS or GOV.uk websites

Written by Clarisse Levitan

Customer Care Team - Staff Squared

Clarisse works on our Customer Care Team to provide all of our customers with the very best care and guidance when using their HR software.

More from our blog

Pay only for what your business needs

  • £

    3

    per person

    per month

  • Try Staff Squared FREE for 14 days. No credit card required.

How can we help?

Staff Squared Logomark Close icon

Let's get your HR started.

Tick FREE for 14 days
Tick No credit card required
Close cross
Enter your email address

Already have an account? Log in

Need help?