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There are two significant laws that determine what businesses must and must not do when it comes to paying their workers. These are the National Minimum Wage Act (1998) and the Equality Act (2010).

What businesses must do

Under the National Minimum Wage Act (1998), all businesses must pay their staff a minimum hourly rate. There is no exemption for small employers or discounts for geographical areas. The aim is to increase the incomes of the low paid. The rates are set each year by the government.

For people aged 16 to 24, this is called the national minimum wage. It varies according to different categories (under 18, 18-20, 21-22 and apprenticeships).

For people aged 23 or over, it is called the national living wage.

What businesses must not do

The Equality Act (2010) makes it illegal for a business to pay people different rates of pay if they are doing the same job or similar jobs. This means, for example, that a business cannot pay a male member of staff more than a female member of staff if they are employed in the same role.