National Minimum Wage

The National Minimum Wage (NMW) increased on 1st October 2007 to:

£5.52 per hour for workers aged 22 years and older
£4.60 per hour for workers aged 18-21 inclusive
£3.40 per hour for all workers under the age of 18, who are no longer of compulsory school age.

Tips and troncs
Tips left by customers cannot be counted as earnings for NMW purposes. If a tronc is operated though, payments made via the employers payroll will count toward the NMW rate.

Directors and officers
NMW provisions do not apply to directors/officers unless they have a contract of employment.

Written statement or employment contract for family members?
All employees should be given a written statement, which although is not a contract of employment is evidence of the terms and conditions of the employment. The statement should be prepared within two months of the employment commencement. Any limited company which engages members of the owner/director’s family should therefore have statements in place to avoid any future problems with HMRC.