In February this year the government announced what the annual Minimum Wage increase for 2020 would be just like they do every year leaving us with a slow month of March while we wait eagerly for the new rates to kick in.
Now, I am pleased to confirm that we have finally arrived in April and that the new National Minimum Wage and National Living Wage rates for 2020 to 2021 are in full force.
When you receive your first pay cheque in April it is time to make sure that you are earning at least the minimum hourly rate specified by the government. We want to help you out with this so keep reading to find out what the Minimum Wage and Living Wage rates are for 2020, what to do if you are being underpaid and what you can do to ensure you can earn more money.
If you are sticking around here, let’s do a quick recap on the terminology. While we refer to them as two different things, there is actually no real difference between National Minimum Wage and National Living Wage other than the legal age brackets associated with each.
The National Living Wage (NLW) is in effect a National Minimum Wage (NMW) for anyone over the age of 23. This National Living Wage is the minimum amount of money anyone over 23 is legally entitled to earn per hour.
First introduced in 2016, the National Living Wage was created with the vision of enabling any person over the age of 23, working 40 hours per week with no additional income, the ability to afford food, shelter, utilities, transport, healthcare and childcare.
Why do younger workers not receive the National Living Wage?
The simplest answer is to protect employment. If young workers newer to the job market and needing to gain skills and experience, cost just as much to employ as someone who is older and has more working experience, then we risk pricing the younger workers out of the market leading to a rise in unemployment amongst the younger community.
What is the National Minimum Wage 2020?
The minimum rates of pay for 2020 are*:
- £8.72 per hour for ages 25 and over (National Living Wage)
- £8.20 per hour for ages 21 to 24
- £6.45 per hour for ages 18 to 20
- £4.55 per hour for school leaving age to 17
- £4.15 per hour for Apprentices over 19 or in their first year.
How does the 2020 Minimum Wage compare to the previous year?
- People aged 25 and over, in receipt of NLW, will receive a 51 pence per hour more.
- People aged 21 to 24, in receipt of NMW, will receive a 50 pence per hour more.
- People aged 18 to 20, in receipt of NMW, will receive a 30 pence per hour more.
- People aged under 18, in receipt of NMW, will receive a 20 pence per hour more.
- Apprentices in their first year or aged 19 and over will receive a 25 pence per hour more.
Are you earning at least the National Minimum Wage for your age?
You can check to make sure you are receiving the correct minimum rate of pay for your age by working through the steps below. There is also a handy calculator tool on the government website.
Step 1: Using the information above check to see what the minimum rate of pay should be for your age.
Step 2: Find a recent payslip, your hourly rate might be shown. Click here to find out how to understand and find key information on your payslip.
Step 3: If your hourly rate is not displayed on your payslip but you do know how much you have earned for the week or the month, you can use our salary calculator to see what you are earning per hour before tax.
It is important to note that whether you work full or part time has no bearing on the rate of pay you are entitled to receive; part time employees have the legal right to earn the same rate as their full time counterparts.
What can you do if you are not being paid the National Minimum or Living Wage?
If you have not received at least the minimum or Living Wage your employer will owe you the difference between what they have paid you and what they should have legally paid you.
Step 1: Talking to your employer is always the best place to start. Ask your employer or the HR department to explain how they have worked out your pay and double check that you are correct in your calculations, mistakes are easily made so don't jump to conclusions before checking things out informally first.
Step 2: If you have confirmed that your pay is incorrect be sure to ask how it will be rectified. It is most likely that they will offer to pay the shortfall immediately or they might include any underpayment in your next pay cheque.
Step 3: This is also a good opportunity to confirm with your employer what your rate should be going forward. Remove any opportunity for further confusion or mistakes by referring to the government website together.
Step 4: If this doesn’t go to plan and the lines of communication between yourself and your employer become difficult to manage, call the Advisory, Conciliation and Arbitration Service (ACAS) helpline on 0300 123 1100, they will check your calculations and work through your options with you.
What if the Minimum Wage I receive is not enough to live on?
The question of whether National Living Wage does or does not meet its true purpose of providing enough money to afford the basics of living as well as childcare is one that has long been debated without resolution. We are without a doubt getting somewhat closer, and the UK does actually enjoy a relatively high Minimum Wage ranking 7th compared to 27 other countries1.
But for the estimated 2 million workers currently earning Minimum Wage1, whether it does meet their needs still very much depends on not only their lifestyle and the size of their family but also where they live. The cost of living can vary quite dramatically throughout the UK and so with all of these factors to consider, it is unlikely that we will every find a one size fits all solution.
What can you do to earn more money?
Take control of your own earning potential and career. Take active steps towards improving your skills, experience, earning potential and ultimately your employability for higher paying positions. Nearly half (48%) of all Minimum Wage jobs are in just three occupation groups: retail, hospitality and cleaning & maintenance1 and so work on developing skills that will see you get a new job in a higher paying sector.
Four fast ways to improve your work skills
- Brush up on your office skills and find out how to get them for free.
- Participate in online courses.
- Seek out an adult learning grant to enable you to return to higher education.
- Take control of your own development and learning by becoming your own Mentor.
*For the most up-to-date National Minimum Wage rates, click here.
References: 1 National Minimum Wage Statistics. Briefing Paper Number 7735, 12 February 2020. Internet Download. file:///Users/Sian/Downloads/CBP-7735.pdf
