Minimum Wage increases from 1 April 2018

19 February 2018

The National Minimum Wage (Amendment) Regulations 2018 has been laid before parliament and amends the National Minimum Wage Regulations 2015.

The rates have been increased in line with the recommendations of the Low Pay Commission (LPC). Each of the rates listed below have been accepted by the government and are due to come into force on 1 April 2018, subject to parliamentary approval.

In any given pay period a worker’s pay must not fall below the National Minimum Wage rate. An employer who fails to ensure this could be faced with financial penalties and may be named and shamed in a government press release. We have certainly seen examples of well-known employers hitting the headlines for unintentionally paying below the NMW; so ahead of the increases in April, it is worth checking your processes and also considering the main common payroll related mistakes that should be avoided:

  • Including tips, gratuities, service charges and cover charges as part of minimum wage pay. They do not count even if they are administered through payroll and they shouldn’t be included when calculating minimum wage pay for employees
  • Including premium rates of pay as part of minimum wage pay. An employer may pay a worker at a higher rate than their standard pay rate for some of the work they do, for example overtime or night shifts. However, this premium element of pay, which exceeds the worker’s basic rate, does not count towards minimum wage pay because it is not guaranteed income
  • Making wage deductions for items or expenses that are connected with the job such as uniforms; this will reduce a worker’s pay for minimum wage purposes
  • Unpaid working time – not paying all the hours worked by your staff. For example, time spent travelling between work assignments or during training
  • Failing to apply the correct rate of pay for apprentices in their second year

To find out more about the National Minimum Wage read the guide for employers from the Department for Business, Energy & Industrial Strategy (BEIS).

You can also use HMRC’s online course on paying your workers the minimum wage for further information.


Minimum wages - reputation and enforcement

Dates are still available during February and March to join the CIPP, IES and Eversheds-Sutherland for a half day briefing on minimum wages. Areas covered include the consequences of a trebling in minimum wage jobs, increasing enforcement, current issues and reviewing your employment and reward models; for full details of when and where these events are being held and to book your place, go to Eversheds-Sutherland.