Updated Monday 4th April 2016 16.34pm
The Government’s National Living Wage is due to be introduced on 1 April 2016 for all working people aged 25 and over, and will be set at £7.20 per hour. The current National Minimum Wage for those under the age of 25 will continue to apply.
As the saying goes, ‘ignorance is no defence’, so here’s a quick fact file on what you need to know; the basics, the government business helplines and the penalties you incur if you don’t play ball.
The National Living wage and the National Minimum Wage is the minimum rate of pay per hour that pretty much every employee is entitled to under UK law. It’s determined by age and whether you’re an apprentice or not – you have to be at least school leaving age to receive it.
National minimum wage for anyone under 25
|Year||25 and under||18 to 20||Under 18||Apprentice*|
|2015 (current rate)||£6.70||£5.30||£3.87||£3.30|
National Living Wage for workers aged 25 and older will be £7.20 an hour.
Who has to pay The National Minimum/Living Wage?
Regardless of how big or small your company is, it’s your obligation as an employer to ensure all your staff are paid correctly. In fact, it’s a criminal offence not to pay correctly or to falsify your records. So don’t do it.
What happens if I don’t pay the National Minimum Wage?
Failure to abide by the new law incurs a hefty penalty of up to £20,000 per worker. Ouch! Not only that, your company can be publicly named and shamed, as Monsoon Accessorize found out to their detriment, which is not such a great idea for your brand. And then on top of all that you still have to pay any arrears immediately anyway. So again, best to pay it. But also it’s a good thing.
With the changes coming into effect next month, to make sure your house is in order there are a number of useful government sites to help you, and they answer pretty much every question you could think of.
- ACAS helpline: 0300 123 1100
- National Minimum Wage Website
- How to work out the minimum wage for different types of work
- National Minimum Wage calculator to check if payments are over the minimum wage.
Let us know what you think of the new rises. Will your business struggle to pay the new minimum? Have you already been paying more than that for years? We’d love to hear your thoughts on how this might affect other small businesses.