As a business owner you will know that the minimum wage rate increased on the 1stApril. This should also be an opportunity to check over your employment records and ensure that you know the details around minimum wage obligations.
The details of the changes are as follows:
- The adult minimum wage has increased from $20.00 to $21.20 per hour.
- The minimum wage for starting-out and training will go up from $16.00 to $16.96 per hour.
All rates are before tax and any lawful deductions for example PAYE tax, student loan repayment, child support.
This applies to:
It applies to all hours worked, unless both parties agree to a higher rate in the employment agreement.
- Full-time, part-time, fixed-term, casual, working from home
- Paid by wages, salary, commission or piece rates (with some exceptions).
But does not apply to some situations, including:
- Employees under 16 years of age.
- Employees on a starting-out wage.
- Employees on a training minimum wage.
- Where a labour Inspector has issued a minimum wage exemption permit to an employee who has a disability that limits them carrying out the requirements of their work.
Details of these:
Paying employees under 16
There is no minimum wage for employees under 16 but all the other minimum standards and employment rights and obligations apply. When an employee turns 16, they must be paid the relevant minimum wage.
Starting-out minimum wage
The starting-out minimum wage applies to workers who are:
- 16- and 17-year-old employees who haven’t done six months of continuous employment service with their current employer. After six months with one employer they are not starting-out workers and must be paid the adult minimum wage.
- 18 and 19 year old employees who have been paid one or more social security benefits for six months or more, and who haven’t completed six months’ continuous employment with an employer since they started being paid a benefit.
Specified security benefits include:- domestic purposes benefit
emergency benefit
independent youth benefit
invalid’s benefit
jobseeker support
sickness benefit
sole parent support
supported living payment
unemployment benefit
widow’s benefit
young parent payment and youth payment.
- domestic purposes benefit
- 16- to 19-year-old employees whose employment agreement states they have to undertake industry training for at least 40 credits a year in order to become qualified in the area they are working in.
If an employee is supervising or training other workers, then the starting-out minimum wage doesn’t apply and they must be paid at least the adult minimum wage.
Calculating six months of continuous service
Six months of continuous employment with an employer is calculated for the next six calendar months from the employee’s first day of work; the number of hours per week the employee works is not relevant. Calculating whether or not an employee has completed six months of continuous service must include any time:
- The employee was employed by their employer before they turned 16
- On leave (paid or not).
- If the employee moves to a new employer, they’ll be a starting-out worker again for the first six months; this applies with each new employer until they reach the maximum age.
Training minimum wage
This applies to employees aged 20 years or over whose employment agreement states that they have to do at least 60 credits a year of an industry training programme to become qualified in the area they are working in. Many of these employees will be apprentices. An apprentice has the same minimum rights and protections under employment law as any other employee but may be paid the training wage
This doesn’t apply to employees who are being trained at work, for example, by their employer at the start of their employment; it only applies to employees doing an approved industry training programme
This doesn’t apply to an employee who is supervising or training other workers. These employees must be paid at least the adult minimum wage.
