Yes. The National Minimum Wage (NMW) is the least that you can be paid for each hour that you work. People aged 22 and over should get no less than £5.80 an hour. People aged 18 to 21 should get at least £4.83. 16 and 17 year olds have been protected since October 1 2004, with a current rate of £3.57 per hour.
Hourly pay for the NMW is worked out as an average over your pay period. If you are paid weekly, the pay period is a week. If you are paid daily, then the pay period is a day and if monthly paid, then the pay period is a month. For many workers, working out their hourly pay is simply a matter of dividing total pay before tax and other deductions (your gross pay) by the number of hours worked. However, some workers have no fixed hours, but are paid by what they produce (their output) or paid on completion of a specific job and for these workers the situation is more complicated.
Output workers used to be expected to draw up a written 'fair estimate agreement' with their employers. This type of agreement, which sets out how long a particular task was likely to take was much abused by employers.
Accordingly in April 2005, the Government replaced fair estimate agreements with a new system of ‘fair piece rates’. Under this scheme, an employer either has to pay the worker the minimum wage per hour for all hours worked, or has to pay 120% of the minimum wage for the number of hours it takes an average worker to complete an agreed block of work.
The employer has to carry out tests to establish the time it takes an average worker to complete the work. For example, if the tests show that for a particular job, the average worker can complete 10 pieces an hour, the employer must pay the workers at least 69.6 pence per piece in order to pay the current national minimum wage rate of £5.80 per hour (£5.80 times 120% divided by 10 pieces equals 69.6p).
The 120% calculation was introduced to reflect that, whilst the average (mean) worker may complete the work that quickly, this means that perhaps 50% of workers will complete it more slowly, and so be paid under the minimum if it were set only at 100% of the National Minimum Wage. The 120% calculation has brought a higher proportion of piece-rate workers under minimum wage protection.
If you think that you are not being paid the National Minimum Wage you can make a complaint directly to the NMW Helpline on 0845 6000 678 (England, Scotland or Wales) or 0845 6500 207 (Northern Ireland). You can also seek further advice from your union if you are a member, or an advice agency.
