NMWM01010 | History of National Minimum Wage and overview of legislation: aims of the National Minimum Wage

Relevant legislation

The legislation that applies to this page is as follows:

• National Minimum Wage Act 1998, section 1

General

The National Minimum Wage came into force on 1 April 1999 and forms an important cornerstone of Government strategy in the workplace. It aims to guarantee decent minimum standards of pay for workers and to promote fair competition between businesses. The Department for Business and Trade (NMWM02020) has policy responsibility for the National Minimum Wage.

Workers

Most workers in the United Kingdom who are over compulsory school age (NMWM03070) and who ordinarily work in the United Kingdom are entitled to be paid at least the National Minimum Wage. The hourly rates (NMWM03010) are based on the recommendations of the independent Low Pay Commission (NMWM02010).

The general right to the National Minimum Wage is set out in the National Minimum Wage Act 1998. Section 1(1) states:

“A person who qualifies for the national minimum wage shall be remunerated by his employer in respect of his work in any pay reference period at a rate which is not less than the national minimum wage.”

The Act also ensures that agricultural workers (NMWM06020) are paid at least national minimum wage rates.

Businesses

The National Minimum Wage aims to stop unfair competition based on artificially low prices achieved by paying workers very low rates of pay. It ensures businesses are able to compete fairly on the quality of their goods and services.