Word of the Week: Wage

Wage

“Wage” refers to the monetary compensation paid by an employer to an employee in exchange for the work performed. In the UK, wages can be paid on an hourly, daily, or weekly basis, and are subject to various regulations to ensure fairness and adequacy.  

National Minimum Wage (NMW) and National Living Wage (NLW): 

• The National Minimum Wage is the minimum pay per hour that most workers are entitled to by law. The rate varies depending on the age of the worker and whether they are an apprentice. 
• The National Living Wage is a higher rate that applies to workers aged 23 and over. As of April 2024, the NLW is set to rise to £11.00 per hour. 

Types of Wages: 

• Hourly Wage: Paid based on the number of hours worked. Common in part-time or casual employment. 
• Salary: A fixed regular payment, typically paid monthly, but often expressed as an annual sum. Salaried workers may not receive extra pay for overtime. 
• Piece Rate: Payment based on the amount of work completed or units produced. 

Overtime Pay: 

• Employees may be entitled to higher rates of pay for working beyond their contracted hours. There are no statutory requirements for overtime pay in the UK, but it must not fall below the NMW or NLW. 

Deductions: 

• Employers may make deductions from wages for taxes, National Insurance contributions, and other reasons such as pension contributions or student loan repayments. Deductions must be lawful and agreed upon in the employment contract.