Age Discrimination and the National Minimum Wage (“NMW”)
The Employment Equality (Age) Regulations 2006 state that an employer must not discriminate against any employee (and others) on the grounds of their age unless this can be objectively justified. So how does this fit with the NMW that by its very nature sets a different salary purely due to the age of the employee and for no other reason?
Well – there is a specific exemption for this in the Regulations (Reg 31). The Government consider that the NMW makes it easier for younger people to find employment, in that employers are less likely to pay younger workers higher salaries and it also encourages them to remain in full time education. Therefore these age bands can be objectively justified. Due to this exemption an employer can lawfully pay employees different salaries based on the age brackets as set out in the NMW legislation which as of October 2006 will be:
- 16 – 17 £3.30 per hour
- 18 – 21 £4.45 per hour
- 22 + £5.35 per hour
BUT – this exemption only applies if you are not paying the younger employee more than the main adult minimum wage rate.
For example you can pay an 18 year old £4.75 per hour and a 23 year old £6.00 per hour for doing the same job. However if you pay the 18 year old £5.50, as this is more than the adult minimum wage rate, this exemption does not apply.
Similarly you cannot pay different rates to employees in the same age category. For example you will not be able to pay an 18 year old less than a 21 year old for doing the same job unless you can objectively justify it.
If you do not base your pay structure on the NWM then this exemption will not apply and you must ensure that your pay structure is not based on the age of the employee, unless you can objectively justify it.
