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The national minimum wage
It is almost ten years since the National Minimum Wage became law and yet it remains as hot a topic as it ever was. Salon Smart Legal Expert Julian Sampson sheds light on a restriction that is here to stay – print it off and keep it handy!
The National Minimum Wage is always a hot topic, and even more so in the current financial climate when employers might argue that the wage is overly restrictive. There is some merit in this argument when you consider the alternative might be for the employer to make the employee redundant or for the employer to close for business entirely. The lesser of two evils some might suggest?
The rates
There are three rates that an employer has to pay:
For Adults: £5.52 per hour
For 18-21s: £4.60 per hour
For 16-17s: £3.40 per hour
These will increase from 1 October 2008 to:
For Adults: £5.73 per hour
For 18-21s: £4.77 per hour
For 16-17s: £3.53 per hour
The TUC has a helpful, and very easy, minimum wage calculator that is available from
http://www.worksmart.org.uk/minwage_calc.php
Working out the wage
You should not be panicking that the minimum wage should be what your employee receives in his or her pocket. The wage calculation is based on gross pay before deduction of tax, National Insurance or even pension contributions.
Record keeping
Your accountant will no doubt already retain many of the key records which the Revenue may wish to see in the event of an investigation as they would usually require these as a part of preparing your financial accounts and forecasts. As a minimum you should ensure you have access to:
* A record of the gross pay payments
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A record of payments for overtime and shifts
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A record of absences, and
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Copies of all your contracts of employment
If you it still seems like a minefield or you simply want a chat then you should take advantage of your solicitor or services like hairlaw.co.uk.
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