page_title: United Kingdom labour law
section_title: Wages and tax
hierarchical_section_title: United Kingdom labour law / Employment rights and duties / Wages and tax
caption_attribution_description: English: Monopsony and minimum wage This diagram has been made by me and I reserve no right on it. -- Mario 09:11, 5 August 2005 (UTC)
context_page_description: United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK benefit from a minimum charter of employment rights, which are found in various Acts, Regulations, common law and equity. This includes the right to a minimum wage of £8.21 for over 25-year-olds under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, and attempts to limit excessively long working hours. The Employment Rights Act 1996 gives the right to leave for child care, and the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995.
  To get fair labour standards beyond the minimum, the most important right is to collectively participate in decisions about how an enterprise is managed. This works through collective bargaining, underpinned by the right to strike, and a growing set of rights of direct workplace participation. Workers must be able to vote for trustees of their occupational pensions under the Pensions Act 2004.
context_section_description: Since 1998, the United Kingdom has fixed a national minimum wage, but collective bargaining is the main mechanism to achieve "a fair day's wage for a fair day's work". The Truck Acts were the earliest wage regulations, requiring workmen to be paid in money, and not kind. Today, the Employment Rights Act 1996 section 13 stipulates that employers can only dock employees' wages (e.g. for destroying stock) if the employee has consented to deductions in writing. This, however, does not cover industrial action, so following 18th century common law on part performance of work, employees who refused to 3 out of 37 hours a week in minor workplace disobedience had their pay cut for the full 37. From the Trade Boards Act 1909, the UK had set minimum wages according to the specific needs of different sectors of work. This eroded from 1986, and then repealed in 1993. One wages council that survived was the Agricultural Wages Board, established under the Agricultural Wages Act 1948. It was abolished in England in October 2013, though boards still operate for Scotland, Northern Ireland, and Wales.
  To bring the UK back into compliance with international law, the National Minimum Wage Act 1998 was introduced. Every worker" who personally performs work, but not for a client or customer, However, it was held that a pupil barrister did not count as a worker. The minimum wage rate is revised annually after guidance from the Low Pay Commission, but since 2010 has been cut for under 25-year olds and young people doing apprenticeships. The National Minimum Wage Regulations 2015 state that for people who are not paid by the hour, total pay is divided by the hours actually worked over an average "pay reference period" of one month. Workers who are "on call" have to be paid when they are on call. But if a worker is given sleeping facilities and is not awake, the minimum wage need not be paid. However, an employer may agree with a worker what the hours worked actually are, if hours are ordinarily be unmeasured. In Walton v Independent Living Organisation Ltd a worker who cared for a young epileptic lady had to be on call 24 hours a day, 3 days a week, but could do her own activities, such as going shopping, making meals and cleaning. Her company made an agreement with her that her tasks took 6 hours and 50 minutes a day, which resulted in her £31.40 allowance meeting the minimum wage. Deductions up to £6 per day can be made for accommodation the employer provides, though extra bills, such as for electricity, should not ordinarily be charged. The minimum wage can be enforced individually through an Employment Rights Act 1996 section 13 claim for a shortfall of wages in a Tribunal. A worker may not be subjected to any detriment for requesting records or complaining about it. However, because many workers will not be informed about how to do this, or have the resources, a primary enforcement mechanism is through inspections and compliance notices issued by Her Majesty's Revenue and Customs (HMRC). A remedy of up to 80 times the minimum wage is available to the worker and HMRC can enforce a penalty of twice the minimum wage per worker per day.
  Unlike the rules for Value Added Tax Act 1994, where consumers must see the prices they actually pay after tax, there is currently no requirement for workers to see the final wages they will actually earn after income tax, and National Insurance contributions. Under the Income Tax Act 2007, as amended each year by the Finance Acts, in 2019 the 'personal allowance' with 0% was up to £12,500 in income, a 'basic rate' of 20% tax was paid on £12,500 to £50,000, a higher rate was 40% on income over £50,000, and a top rate of 45% over £150,000. The top rate of income tax has been dramatically cut since 1979, while taxation for the richest people, who receive most money through capital gains, dividends, or corporate profits has been cut even further. People will be classified as liable to pay income tax whether or not they work through a company. From 2015 to 2019, the "personal allowance" was linked to the minimum wage
caption: Modern economic theory suggests a reasonable minimum wage will raise productivity, equality and employment because labour markets are persistently monopsonistic, and people on lower incomes spend more money, stimulating effective aggregate demand for goods and services.[103]
exif: {}