From 1st October 2008 the minimum wage was £5.73 per hour for over-21s, £4.77 for 18-21 year olds, and £3.53 for 16 and 17 year olds who are above school leaving age and are not apprentices. These rates went up on 1 October 2009 to £5.80, £4.83 and £3.57.

General information for employees and employers about all aspects of minimum wage is available from 0845 6000 678 or on the Department for Business, Enterprise and Regulatory Reform's (now Department for Business, Innovation and Skills') national minimum wage website which can be accessed via tinyurl.com/34bp48. In addition there is an interactive website, enabling workers and employers to find out how the minimum wage applies to them, at http://www.tiger.gov.uk/.

The accommodation offset rate (the amount that can be taken into account for living accommodation) is £4.46 per day (£31.22 per week), and went up to £4.51 per day (£31.57 per week) from 1 October 2009. Guidance for workers and employers on how the accommodation offset operates is at www.berr.gov.uk/files/file38769.pdf.

The National Minimum Wage Act 1998 is at www.opsi.gov.uk/acts/acts1998/19980039.htm.
The National Minimum Wage Regulations 1999 (Amendment) Regulations 2008 are at www.opsi.gov.uk/si/si2008/uksi_20081894_en_1. The draft 2009 regulations can be accessed via tinyurl.com/lou5u4.

From 1 October 2010 the adult rate will apply to 21 year olds, and minimum wage may be extended for apprentices. Apprentices are currently exempt from minimum wage if they are under 19, or are 19 or over and in the first year of their apprenticeship. There is a minimum rate of pay of £80 per week (to go up to £95 from August 2009) for Learning and Skills Council apprenticeship contracts.

Tips, Gratuities and Minimum Wage

Organisations which employ staff in restaurants, bars etc where they may receive tips need to know that under an employment appeal decision in June 2008, confirmed by the court of appeal in May 2009, tips paid to staff via a tronc do not count towards minimum wage. A tronc is a system for pooling tips, paying them into a troncmaster's account, and distributing them to staff. Tips paid direct to the employee by customers also do not count towards minimum wage.

However, under the National Minimum Wage Regulations 1999 reg.31(1)(e), tips paid to staff through the employer's payroll currently count towards minimum wage. Following consultation, from 1 October 2009 this was amended, and no tips or service charges will count towards minimum wage even if paid to workers through the payroll.

Employment Status Indicator for Self Employed Workers

Treating someone as self-employed - paying them without deduction of tax and national insurance - when they should legally be on PAYE can land the employer with a very large bill tax and NI which should have been deducted, plus interest and penalties. To avoid this risk, employers (referred to as engagers) and workers can use the HM Revenue & Customs employment status indicator (ESI) to determine whether a person should be treated as an employee and taxed under PAYE, or is a contractor and can be taxed under self-assessment.

The ESI is at http://www.hmrc.gov.uk/calcs/esi.htm and is filled in anonymously. The results of the ESI can be relied on in the event of an HMRC enquiry into the worker's status for tax, national insurance or VAT purposes, if the answers to the ESI questions accurately reflect the terms and conditions under which the worker is contracted, the ESI has been completed by the engager or their authorised representative, and the engager can produce a copy of the ESI result.

The ESI cannot be used to check the employment status of company directors and other individuals who hold office, agency workers, and anyone providing services through an intermediary (IR35 arrangements).