Increase to National Minimum Wage

On the 1st of October 2015 the national minimum wage increased from £6.50 to £6.70 per hour for those aged 21 and over. There was also an increase for those aged between 18 and 20 to £5.30 per hour. For those aged under 18 the minimum wage has risen to £3.87, whilst the hourly rate for apprentices also increased by 20% to £3.30 per hour. This rate for apprentices is for those aged 16-18 and for those aged 19 or over who are in the first year of their apprenticeship. All other apprentices are entitled to the national minimal wage based on their age.

The Government’s decision to increase the national minimum wage was made back in March 2015 and stemmed from the Low Pay Commission’s recommendations. The enhanced national minimum wage is said to be the largest real-terms rise in seven years and it is thought that it will benefit more than 1.4 million workers across the UK. Although the 3% increase in the national minimum wage for adult workers has been welcomed by many, it has also led to some criticism. TUC general secretary Frances O’Grady has criticised the modest increase in wages stating that the rise is “nowhere near enough to end in-work poverty”.

The national minimum wage was first introduced in 1999 and employers are obliged to comply with the law, irrespective of the size of the business. The government has announced tougher penalties from April 2016 for non-payment of the relevant wage which include plans to double the enforcement budget and to set up a new team in HMRC to pursue criminal prosecutions for employers who deliberately do not pay workers what they are due. Penalties will be doubled, from 100% of arrears owed to 200%, although the figure will be halved if paid within 14 days. The maximum penalty shall still remain £20,000 per worker. At present a worker who does not receive their minimum wage can claim for breach of contract and unlawful deduction of wages. In all cases it will be presumed that the worker has not been paid the national minimum wage unless the employer can prove to the contrary.

An obligatory National Living Wage of £7.20 per hour will also come into force in April 2016 for workers aged 25 and older. At such time the minimum wage will still apply to those aged 24 and under.

Should you or your business require any further guidance regarding the above points then please do not hesitate to contact us on 0161 975 3823.