All employers must pay their employees the national minimum wage. Currently, for those over 21, the national minimum wage rate is £6.50 and this will increase to £6.70 on 1 October 2015. Ms Barlow's hourly rate of pay was £7.68. However, whilst on the face of it Ms Barlow was being paid an adequate wage, it is an employee's average hourly rate over a certain period of time which must be examined, to determine whether the NMW is being paid. It is Ms Barlow's position that the time spent travelling between her appointments should have been taken into account in determining this hourly rate. She argues that if this is done, her average hourly pay was less than the NMW.
Given the size of MiHomecare, if Ms Barlow is successful, and assuming she is not the only employee who is not paid for her travel time, this could have serious financial ramifications for MiHomecare and indeed, any other employers that adopt the same practice.
It is worth noting that a financial penalty, not exceeding £20,000, can be imposed on employers who do not pay the NMW. Since 26 May 2015, under the Small Business, Enterprise and Employment Act 2015, this maximum penalty applies to each underpaid worker. Therefore, getting the NMW wrong can have serious financial consequences for employers.
In the future, the Government has announced its intention to introduce a living wage. The manner in which they propose to do this is by adding a premium to the NMW for those who are 25 or over. They have proposed applying a premium of 50p from April 2016. This would have the result that the NMW for employees aged 25 or over would be raised to £7.20 (based on the NMW rate from 1 October 2015).