The Differences Between The Minimum And Living Wage
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The Differences Between The Minimum And Living Wage
There are a lot of people who confuse the minimum wage with the living wage.
It is important to note that these are two different types of wages that are applied to people differently based on certain criteria.
Knowing the difference between the minimum wage and the living wage will ensure that you know what you should be getting.
The National Minimum Wage
The national minimum wage or NMW is the minimum amount you have to be paid.
This will be for people who are under the age of 25 and is mandated by law.
If an employer is found to not be paying the correct minimum wage to employees, HMRC will be able to take them to court. Alternatively, the employee can raise a grievance against their employer.
The National Living Wage
The national living wage or NLW is also a minimum amount that you legally have to be paid.
The primary difference from the NMW is that this is applied to people who are aged 25 and over. The NLW is also mandated by law and companies can be taken to court if they are found to not be paying this.
When looking at the living wage, it is important to note that there is a difference between the NLW and the Living Wage.
The NLW is set by the government and is an hourly rate that is amended each year. The Living Wage is set by the Living Wage Foundation and is calculated based on living costs in the UK.
Employers will only have to legally pay the NLW which is generally lower than the Living Wage, but the Living Wage can be paid voluntarily by employers.
Exceptions To The Rates
It is important to note that there are some people who are not legally entitled to the NMW or the NLW. These people will include the self-employed and company directors.
Members of the armed forces and work experience students will also not be legally entitled to this. All other workers in the UK will have to receive either the NMW or the NLW based on their age.
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The Age Ranges
The NLW does not have any age ranges which change the amount that is paid to employees. The NMW does have these ranges with school leavers up to 17 years of age being paid the least.
The next age range will be 18 to 20 followed by 21 to 24. When the age of 25 is reached, the employee will have to be paid the NLW and not the NMW. For workplace disputes, contact DPH legal solicitors for employment law advice.
Disclaimer: The contents of this article are for information purposes only and should not be relied upon as formal legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Specific legal advice should be sort tailored to the individual circumstances in all cases.
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