Pay and Wages
Pay and Wages – Your pay rights as an employee
Pay and Wages – You have a right to be paid for the work you have done, and in most cases, you should also be paid if you are prepared to work but your employer has not made any work available to you. Almost everyone is entitled to receive pay at the National Minimum Wage rate at the very least.
These rates are for the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those of at least school-leaving age). The rates change on 1 April every year.
|23 and over||21 to 22||18 to 20||Under 18||Apprentice|
|April 2022 (current rate)||£9.50||£9.18||£6.83||£4.81||£4.81|
There are some types of worker who do not have the right to be paid the minimum wage. These are:
- self-employed people
- workers aged below 16
- voluntary workers
- company directors and other officeholders
- members of the armed forces
- Share fishermen
- workers (such as nannies) living in their employer’s family home who do not contribute to the cost of their accommodation or meals
- trainees on some government schemes or European Community Schemes
- workers on government employment or pre-apprenticeship schemes
- higher and further education students on work placements lasting up to a year
- members of religious communities who live and work there
Your employer may, of course, choose to pay you more than the National Minimum Wage and this will be set out in your contract of employment. How you are paid is also up to the employer; the law does not say anything about the way in which you should receive your money. Your contract should also state how often your wages will be paid.
Pay and Wages – If an employer does choose to pay more than the National Minimum Wage, they cannot discriminate against certain groups of people when deciding on wages. See our discrimination section for more details on this.
You should receive an itemised payslip at or before the time that your wages are paid. It should detail the gross and net amount of salary, the total amount of any deductions, and the purpose of the deductions. If your wage is split and paid in several different ways, the payslip should also provide full details of this.
Pay and Wages – Deductions from your wage which are not required or permitted by law (as opposed to, for example, tax or national insurance) must meet with your approval before they can be taken. An employer may detail certain deductions in your contract, but you must have been provided with a copy of this or a written explanation of the deductions before they are taken. Alternatively, you may be asked to consent to additional deductions in writing.
Pay and Wages – You should still be paid if you are off sick, or on maternity, paternity or adoption leave. You also have the right to a certain amount of paid holiday per year. For details of this, please see our section about time off work.
If an employer provides accommodation for a worker or employee, this may entitle them to pay less than the minimum wage. This is known as the accommodation offset.
Pay and Wages – Currently, the maximum accommodation offset is £5.08 per day or £35.56 per week – this means that your employer could underpay you by £5.08 over the course of a day’s work if you are being provided with somewhere to live.
Information on pay
Fundamentally, things your employer should tell you regarding your pay when you start work are:
- the scale or rate of remuneration or the method of calculating it
- the method of payment, i.e directly to your bank, cash or cheque
- the date of payment, i.e weekly, monthly; and when in the month
Pay and Wages – Legally, as a new employee, or when entering a new contract at work, your employer must present you with a written document informing you of your agreed rate. Normally contained in your contract of employment, it should also state the intervals at which you will be paid. You should receive this written information within two months of your start date.
Bonuses and performance-related pay
It is commonplace for a business to have a system of pay related to employee performance. A company may at any point introduce such a structure, encouraging higher performance by rewarding hard work with pay bonuses.
Pay and Wages – However, the employer should be aware that unilaterally changing the terms of an employee’s contract of employment could potentially lead to claims for breach of contract or, in the case of an employee who resigns, constructive dismissal.
Short-term bonus schemes
It is often the case that short-term schemes are incentive-driven by offering bonus payments or commissions. With varying incentive amounts, such schemes are designed to enhance staff performance.
Long-term bonus schemes
Alternatively, long-term schemes mostly offer other rewards, i.e. share options, engendering loyalty amongst staff and ensuring that they strive to meet company goals.
What if you don’t receive or only partially receive your bonus?
Firstly, having checked your contract of employment, and consulting your employer, further consult your employee handbook, and/or your written statement of employment terms.
It may be the case that bonus payments are distributed at the employer’s discretion, meaning your employer is entitled to determine which employees receive payment and the set amount. In this instance, your employer must be able to reasonably justify the system in place.
If you suspect a mistake has been made you should:
- firstly, address your employer regarding the issue in the case of a misunderstanding
- secondly, ask your employer for a written assessment of your calculated pay
- retain copies of any written documentation including notes of any meetings
Deductions from wages/breach of contract
Pay and Wages – Any bonus rights should ordinarily be in your contract of employment, though may not always be in writing. Your employer may verbally agree on a structure, however.
When a commission or bonus is confirmed contractually, non-payment is a breach of contract by the employer, pending other terms or conditions stating differently. Payment failure could also result in a claim for an unauthorised deduction of wages.
Pay and Wages – As an employee in this situation, you would be entitled to claim both breaches of contract and unlawful deduction from wages, though you would not be eligible to get back more money than you have lost.
Pay and Wages – It is unethical and illegal for an employer to discriminate against groups or individuals, e.g. against sex and age by awarding smaller bonuses to women or younger employees of the same position. In most cases, an employer would have some guidelines set out the normal bonus amount and structure.
Pay and Wages – Most employees have the right to a payslip detailing their earnings, describing any deductions to their wage and explaining how they have been paid.