National Minimum Wage and Living Wage

In most jurisdictions, employers are legally required to pay at least the National Minimum Wage. This rate often varies based on your age and whether you are an apprentice. It is a criminal offense for an employer to pay less than the statutory minimum.

• National Living Wage: Usually the highest rate, applicable to workers over a certain age (e.g., 21 or 23).
• National Minimum Wage: Applicable to those of school-leaving age up to the Living Wage threshold.
• Apprentice Rate: A specific rate for those in the first year of an apprenticeship or aged under 19.

If you suspect you are being underpaid, you should keep a detailed record of all hours worked, including unpaid overtime or 'pre-shift' briefings.

Understanding Your Payslip

Employers are legally obligated to provide a payslip on or before every payday. This document serves as your formal record of earnings and tax contributions. A standard payslip must clearly distinguish between your gross pay and your net pay.

Key Components of a Payslip

• Gross Pay: Your total earnings before any tax or insurance is taken out.
• Net Pay: The 'take-home' amount that actually enters your bank account.
• Tax Code: A series of numbers and letters used by the tax office to tell your employer how much tax to deduct.
• National Insurance (NI) Number: Your unique identifier for social security and state pension contributions.
• Pay Period: The dates the payment covers (e.g., Monthly or Weekly).

Always check that your payslip accurately reflects the number of hours you worked, including any enhanced rates for overtime or bank holidays.

Lawful and Unlawful Deductions

An employer cannot simply take money out of your wages whenever they choose. Deductions are only lawful if they meet specific criteria. Generally, a deduction is legal if it is required by law, authorized by your contract, or agreed upon by you in writing beforehand.

Common Lawful Deductions

• Income Tax and Social Security: Mandatory payments to the government.
• Pension Contributions: Automatic enrollment or voluntary payments into a retirement fund.
• Student Loan Repayments: Deducted once your income exceeds a certain threshold.
• Court Orders: Such as child maintenance or debt repayments ordered by a judge.

Important Note: Even for lawful deductions like till shortages in retail, an employer usually cannot deduct more than 10% of your gross pay in any one pay period.

Statutory Holiday and Sick Pay

Your total remuneration package includes more than just your hourly rate. Most workers are entitled to paid annual leave. The amount of holiday pay you receive should be based on your average weekly earnings over a specific reference period.

• Statutory Sick Pay (SSP): If you are too ill to work, you may be entitled to a minimum weekly payment for up to 28 weeks.
• Holiday Accrual: You start building up your holiday entitlement from the day you start work, including during your probationary period.

If your employer refuses to pay statutory rates for leave or sickness, this may constitute an unauthorized deduction from wages, which can be challenged at an employment tribunal.

Resolving Pay Disputes

If you notice a discrepancy in your pay or an unexplained deduction, your first step should be an informal discussion with your payroll department or manager. Many errors are administrative and can be corrected in the next pay cycle.

If the issue remains unresolved, you may need to follow a formal grievance procedure. External bodies such as ACAS (in the UK) or equivalent labor relations boards offer free, impartial advice and early conciliation services to help resolve wage theft or underpayment issues without going to court.