Changes to the National Minimum Wages

The National Minimum Wage Act 1998 lays down minimum levels of hourly pay for certain employees. The current rate for those aged 21 and over is £6.70 per hour. From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 introduce the national living wage, set at £7.20 per hour, for workers aged 25 and over.

The National Minimum Wage Regulations 2015 make sure that the hourly rate, at which a worker is entitled to be paid in respect of his or her work in any pay reference period, is the rate that is in force on the first day of that period. The pay reference period is a month or, in the case of a worker who is paid wages by reference to a period shorter than a month, that period. Therefore, where a pay reference period begins before 1 April 2016, the old rate of the national minimum wage will apply for that pay reference period.

From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 introduce a compulsory national living wage of £7.20 per hour for all workers aged 25 and over. The Regulations also double the financial penalties for which employers will be liable if they are found to have paid any workers below the national minimum wage. The penalty is increased from 100% to 200% of the total underpayment for all workers specified in the HMRC notice of underpayment.

If you need to know more about these changes, how they affect your business and your employees, or how to handle the changes, come to our next Employment Law Update workshop. It is being held on 12 April 2016 in Wargrave, Berkshire and costs just £20 +VAT. Click here for details and online booking.