National Living Wage

08 Feb 2017

With much fanfare in 2016 we saw the introduction of the “National Living Wage” (NLW). Employers and employees could be forgiven for thinking that this represented a significant change in the law, but in fact it was simply a re-branding of the existing “National Minimum Wage” (NMW).

The NLW introduced a new age category to existing NMW laws of workers aged 25 or over, and it updated the rates, so from autumn 2016 the following hourly rates apply:

  • Workers aged 25 +
£7.20
  • Workers aged 21-24
£6.95
  • Workers aged 18-20
£5.55
  • Workers aged under 18
£4.00
  • Apprentices
£3.40

                                             

 

 

 

 

 

The hourly rate is simple enough, but there is still scope for disputes to arise. For example:

  • There can be grey areas as to what constitutes working time for which NLW should be paid. There has recently been a European case establishing that mobile workers should be paid for travel time to and from the first and last appointments of the day[1]. A group of care workers are currently pursuing a claim in the UK tribunal relating to travel time between clients. Sports Direct was found to be breaching the rules by not paying for the time its employees spent after the end of a shift waiting to undergo compulsory searches.
  • There are rules on what can and cannot be deducted from NLW. The clothing store Monsoon breached the rules because it required staff to purchase its products to wear at work, and it deducted the cost from their wages.
  • Only workers and employees are entitled to NLW, not those who are self-employed. There can therefore be disputes relating to worker status, for example the recent first instance Employment Tribunal decision on whether Uber drivers were workers[2].

 


[1] Federacion de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and another (European Court of Justice c-266/14)

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