What is the minimum wage?
In short
The minimum wage is the lowest hourly rate an employer may legally pay most workers. In the UK it is set by the government, with separate rates by age and for apprentices.
In plain words
The top adult rate is called the National Living Wage. Younger workers and apprentices have lower National Minimum Wage rates. The rates usually change each April. The Low Pay Commission, an independent body, advises ministers on where to set them, looking at jobs, pay, and the wider economy. The figures move, so a number you remember from a previous year may already be out of date.
A simple example
A worker is paid for a shift of eight hours. If their hourly rate, once you spread the pay across the hours actually worked, is below the legal minimum for their age, the employer is underpaying. Unpaid extra time, and some deductions, can pull a headline rate below the legal floor. Tips do not count towards the minimum. A salaried job can break the rule too, if the hours worked make the hourly equivalent too low.
Why it matters
A floor stops the worst underpayment and lifts pay for people with little power to bargain. Set much too high, too fast, and some employers may cut hours, hire fewer people, or raise prices. Set too low and work does not pay. That trade-off is why the rate is reviewed rather than frozen, and why younger workers have been given different rates — a judgement about jobs and training, and one people argue over.
Easy to mix up
The UK National Living Wage is a legal minimum. The voluntary Living Wage, set by the Living Wage Foundation from the cost of living, is a separate, higher figure that some employers choose to pay. They share a name and they are not the same rule. The minimum wage is also an hourly floor, not a salary. Genuinely self-employed people sit outside it, which is why passing an employee off as self-employed is a known dodge.