As Furloughed Employees return to work, a Recap on the difference between the National Minimum Wage and the National Living Wage

While many employees are now working from home, and experts are providing advice on how to do so, it’s easy to forget that many furloughed Welsh employees are now returning to work.

Employers will have put precautionary measures in place to protect employees, including;

  • Ensuring that correct social distancing policies are followed as advised by government
  • Frequent cleaning of objects and common areas
  • Shops should hold returned merchandise for at least 72 hours before putting them back on floor
  • One-way systems to minimize contact
  • Indoor pubs and restaurants only provide table service
  • Collecting customer details for the NHS test and trace systems

Can an employer make you come back to work?

According to Simon Rice-Birchall, employment law expert – ‘People can’t assume they will be paid if they don’t go to work. However, employers should be extremely careful about deciding to discipline or sack them. Under employment law, workers have the right to walk off the job to protect themselves from serious and imminent danger’.

Employees who may have been furloughed may not be aware of changes that happened during their absence, not least changes to the National Minimum Wage and the National Living Wage.

Increases to the National Minimum Wage and the National Living Wage

The National Minimum Wage and National Living Wage rates were increased on the 1st of April 2020,  rising to £8.20 and £6.45 respectively.  Workers on furlough should have received adjusted furlough pay to reflect the higher rate, and employees who have had their birthday whilst on furlough should check to make sure they received any increase due from that date.  The minimum wage increase will help thousands of low-income families, adding roughly £1,000 to their annual salary.

What is the difference between the National Minimum Wage and the National Living Wage?

Within the UK, the National Minimum Wage regulations set out the minimum wage for employees aged 24 and under.  Current rates can be found here:

The National Living Wage only applies to employees over the age of 25 years old, and is set by the Government, currently at £8.72 per hour, which employers must pay.

However, confusion often arises with the Living Wage Foundation, who each year recommend a ‘National Living Wage’ which they calculate to be the cost of achieving an adequate standard of living in the UK.  This rate is higher than the Government’s current rate, which is £9.30 per hour outside London, for all workers aged 18 and over.  The current recommended living wage for people working in London is £10.75 per hour, which reflects the higher cost of housing, childcare and transport needs of workers living in the city.

Unlike the National Living Wage and National Minimum Wage this rate is not legally enforceable. However, over 4,000 organisations have signed up as accredited living wage employers, ranging from FTSE 100 companies and some large local authorities to small businesses and charities.

Assistance from Payroll UK may help with the rules and regulations when it comes to issues ranging from legal pay rates, maternity leave, off payroll working rules and a range of other topics surrounding legal pay requirements.

Exemptions to the Minimum Wage

UK Minimum Wage rates do not apply to everyone and there are some exemptions.  These include:

  • People that are self-employed;
  • Workers under the age of 16;
  • Au Pairs, nannies or people not paying towards accommodation or meals;
  • Volunteers;
  • Armed forces,
  • Prisoners;
  • Trainees or interns – this is according to your employer’s discretion; confirm this with your employer;
  • Some farm workers.

However, if you do not fall into these categories, you had a birthday during furlough and did not receive a pay rise, or if your wage is less than the minimum wage, you should speak to your employer or seek advice from the Acas website or helpline.


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