“Am I being paid enough?”
The National Minimum Wage (NMW) and National Living Wage (NLW) have increased every year since their introduction. From April this year, there has been quite a jump!
It means 2.9 million of the lowest paid workers in the UK get a pay rise! It’s good timing, because we all need to earn more to cope with the cost-of-living increase we’re all facing at the moment.
This article covers the changes and what you can do if your employer doesn’t pay you enough.
The changes
- NLW (age 23+) has increased 9.7%, from £9.50 to £10.42
As you can see, the NLW leapt by 9.7% from £9.50 per hour to £10.42 for workers aged 23+. If you work full-time, that’s the equivalent of more than £1,600 extra per year before tax!
The NLW was introduced in 2016, and these are the highest increases it’s had, both in percentage terms and cold hard cash. It’s part of The Government’s manifesto commitment for the NLW to equal 2/3 of median earnings by 2024, “provided economic conditions allow”.
In addition…
- NMW (21-22) has increased 10.9%, from £9.18 to £10.18
- NMW (18-20) has increased 9.7%, from £6.83 to £7.49
- NMW (under 18) has increased 9.7%, from £4.81 to £5.28
- Apprentice Rate has increased 9.7%, from £4.81 to £5.28
- Accommodation Offset has increased 4.6%, from £8.70 to £9.10 (that’s the maximum daily amount an employer can charge without it amounting to a reduction of pay for NMW purposes)
The 2023 NMW for 21 and 22 years is 52% higher and the NMW for apprentices is 60% higher than the 2015 rates.
The Government says the rises will benefit workers in industries such as retail, hospitality, cleaning and maintenance, as well as women from ethnic minority backgrounds.
Note that, if you’re in a job where you get tips, these are not counted towards the NMW.
Defining ‘wages’
When you make a claim for deduction from wages, you must be clear about the exact amounts you’re claiming for.
Wages are defined in the Employment Rights Act as sums that are payable in relation to your employment. These include:
- Salary, holiday pay, bonus or commission – whether contractual or otherwise
- Pay that you are entitled to under statute (e.g. statutory sick pay or statutory maternity, paternity, adoption or shared parental pay)
- Statutory payments in lieu of wages (e.g. time off for trade union duties, to look for work or go to ante-natal appointments, and guaranteed payments)
- Benefits that have a monetary value which are received as part of your employment
- Payment of ‘protective awards’ if your employer fails to adhere to minimum consultation time periods
These payments do NOT count as wages for the purposes of unlawful deductions:
- When you’ve taken out a company loan
- Amounts you’ve been paid as an advance of wages
- Repayment of expenses you incurred as part of your job
- Retirement or pension payments you’ve received
- Compensation you got for redundancy or losing your job
- Bonuses you’ve been paid that have a ‘clawback’ provision e.g. To be repaid if you resign within six months
Unlawful deduction from wages
If you’re paid less than you should be, it’s known as is ‘unlawful deduction from wages’.
These are the situations when your employer IS allowed to make a deduction:
- If they accidentally overpaid you
- If you’ve taken part in industrial action
- If it’s authorised in your contract of employment
- If you agreed to the deduction in writing, in advance
- If you work in retail or the restaurant trade and there’s a shortfall in the till, your employer can legally deduct up to 10% of your gross wages to cover the loss (the amount can be spread over weeks or months up to a maximum of 10% per pay period, and any outstanding amounts will be deducted in full when you leave)
If your employer threatens to make a deduction from your wages, but doesn’t actually do so, you can’t make a claim against them. You can only claim for actual financial loss.
If your employer consistently pays you late, it might feel like a deduction from your wages, but going to the employment tribunal won’t get you paid twice for the same time period even if you win.
Are you paid enough?
If your employer is not paying you the current rates, here’s what to do:
First, speak to your manager or HR department. You may be able to sort it out informally.
If that doesn’t work, you should make a formal grievance. To do this, it’s important to check your employment contract and staff handbook to find and follow the proper process. (We can provide support at this stage.)
You should then get advice from Acas or HMRC. (We also help employees through early conciliation, which is what this stage is called.)
Ultimately, you can take them to the Employment Tribunal and bring a claim against them.
For expert insight, please talk to us – the earlier the better. We are employment lawyers covering the UK mainland and Northern Ireland. As such, we have years of experience in dealing with wage claims on behalf of employees who are being wrongly underpaid.
How we help
We help employees to:
- Submit a grievance
- Liaise with ACAS (or the LRA in NI)
- Issue a claim
- Negotiate a settlement agreement
The reason you should act quickly is because any claim that goes to the employment tribunal must be made within three months less one day.
The time limit starts from:
- The date on which payment was due (for a deduction or shortfall of wages due)
- When the contractual obligation to the payment arose (where you haven’t been paid at all)
- From the last deduction or payment in the series (where your employer has made a series of deductions)
Claims can go back over a period of two years before the date you start the claim, unless you are claiming statutory sick pay, statutory maternity pay and other statutory payments – in these cases there is no limit on how far your claim can go back, as long as you start it in time from the last deduction.
If you win your case, you’ll be awarded the income you should have received, plus any expenses you may have incurred due to the non-payment, such as bank charges.
Your other options
Your employer might be in breach of contract – you can claim for that.
You might feel forced to resign and make a claim for constructive dismissal (these are easier to win than claims for wrongful dismissal).
Depending on the situation, your claim might be taken to the County Court or High Court rather than the Employment Tribunal.
As always, the law is a complex beast, and we recommend you take expert advice to discuss your unique situation. Give us a call. The initial conversation is free and our friendly employment lawyers will help. What’s more, your employer will usually cover our bill.
Related reading
- Wage claims / Deductions from wages
- Am I entitled to increased holiday pay?
- Bad news about NMW for sleep-in care workers
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