The National Minimum Wage

All workers aged 16 years or over, are entitled to be paid, at least, the National Minimum Wage.  From October 2007

• If you are aged 16 or 17 years old you are entitled to £3.40 an hour  (£3.30 an hour previous to Oct 2007);
• If you are aged 18, 19, 20, 21 years old you are entitled to £4.60 an hour (£4.45 an hour previous to October 2007);
• If you are aged 22 or over you are entitled to £5.52 an hour (£5.35 an hour previous to October 2007). 

Piece rate

Some people (especially homeworkers) are not paid by the hour but by what they produce (their output), or are paid on completion of a specific job.  This is called being paid by piece rate. You are still entitled to the minimum wage if you are paid by piece rate.

Deductions from wages

Employers can only make deductions from your wages if:

• you have agreed in writing beforehand to the deductions being made
• your contract or written agreement with your employer allows the employer to make the deductions
• the deductions are required by law.

You can expect your employer to make the following deductions:

• Tax and National Insurance: - In most cases your employer will deduct money from your wages for tax and national insurance contributions
• Accommodation: - If accommodation is provided for you, the maximum that can be taken from your pay is £4.30 per day or £30.10 per week from October 2007 (previous to October 2007 the rates are £4.15 per day, £29.05 per week). This doesn’t mean that you can’t be charged more, but this amount only, can be taken off your pay before working out whether you are getting the minimum wage.
• Payments for Goods and Services: - If you choose to use any goods like meals or transport, which is provided from the agency then deductions can be made from your wages.  If, however, you are not given a choice, the deductions made cannot result in your hourly rate of pay falling below the rate of minimum wage. 

Pay Statements

Employers should give you a pay statement with your wages. At a minimum this should include

• the name of the employer or hirer that is responsible for paying your wages,
• the gross amount that you have earned together with, information on how this sum has been calculated (for weekly wages usually the hourly rate and the number of hours worked)
• deductions made for tax and National Insurance purposes
• any other deductions made with the reasons for making the deductions
• the net amount of wages, that is, your gross wage minus all the deductions made – this is sometimes referred to as your ‘take home pay’.

You should keep all of your pay statements as these can be very useful as evidence should you have any dispute about whether you are being paid your full wages.

National Insurance and Tax

In order to work legally you will require a National Insurance Number.  To get a National Insurance Number you will need to contact your nearest Job Centre Plus by calling 0845 6000 643.  You will need proof of your identity, such as a passport, as well as evidence that you are working.

If you work in the UK you will, most likely, have to pay National Insurance and Tax contributions.  Your employer should make the arrangements to deduct the appropriate amount of tax and National Insurance from your wages (see page on  deductions allowed from your wages). Your employer should give you pay statements which include the amount of tax and National Insurance that has been deducted from your wages.

Some employers may offer you a job without paying National Insurance or tax.  This is also known as cash in hand, and is against the law.  It will be hard for you to enforce any of your legal rights if you are not working legally.

Keeping records

Disputes over whether your employer has paid you the correct wage, or even the minimum wage, often centre around the number of hours that you have worked, the employer claiming that you have not worked as many as you actually have. We strongly advise you, therefore, to keep a written record of all the hours that you work on a daily basis – record your start time, finish time and any breaks that you have. The Vulnerable Workers Project can supply you with booklets to help you do this.

Bank Accounts

A lot of employers and employment agencies pay wages to their workers through bank accounts. Your employer or employment agency will require your bank details if they pay by this method. To open a bank account you will need identification to prove who you are and where you live.  This can be a driving licence and a bill (gas, electricity or telephone).