Continuing in our series of questions linked to Payroll, we look at the National Minimum Wage (NMW)

Question: I have heard the minimum wage is going up from October 2009. What is this going up to?

Most workers in the UK over compulsory school leaving age are legally entitled to be paid at least the NMW. It makes no difference if:

• staff are paid weekly or monthly, by cheque, in cash or in another way
• if staff work full time, part time or any other working pattern
• if staff work at your own premises or elsewhere
• what size you, as the employer, are
• where in the UK your staff work.

Employees are entitled to the NMW even if they sign a contract agreeing to be paid at a lower rate, either of their own free will or because you persuaded them to. The contract will have no legal effect and the employee must still be paid the proper rate.

The following classes of workers are commonly thought to be outside of NMW legislation, but this applies to them too:

- Agency workers are entitled to receive the NMW. Whoever they are paid by (usually the agency rather than whoever you are sent to work for) is regarded as your employer for NMW purposes.

- Apprentices - If aged 19 or over and have completed the first year of your apprenticeship they are entitled to the NMW. Apprentices for NMW purposes are either workers who have contracts of apprenticeship or workers taking part in training schemes who are treated as if they have a contract of apprenticeship.

- Foreign workers - Workers from outside the UK who are legally working are entitled to the NMW. It doesn’t matter how long or short a time they stay here or whether the employer is based in the UK or somewhere else.

- Piece workers - If individuals are paid by the number of items they produce or tasks they perform, they must either be paid at least the NMW for every hour they work or what is called a ‘fair’ piece rate for each piece produced or task performed. There are special rules for working this out.

- Homeworkers are entitled to the NMW, unless they are running their own business.

- Workers with a disability are entitled to receive the NMW, unless they undertake work-related activities for purely therapeutic reasons, with no contractual obligation to work or right to any payment or other reward.

- Trainees or workers on a period of probation are still entitled to the NMW. There are exemptions for some apprentices and workers on training courses.