HR Alert: New national living wage

MILLIONS of workers across the country will receive an increase in pay as the new national living wage comes into force from the beginning of April.

This new statutory minimum rate must be paid to workers aged 25 years and over, with the national minimum wage still applying for those aged 24 and under. The government aims for the rate to reach 60 per cent of median earnings by 2020, meaning an increase to around £9 per hour for those who qualify.

A new team of compliance officers in HMRC will investigate the most serious cases of employers not paying the national minimum wage and national living wage.

Currently, employers found to be paying under the national minimum wage rates face a fine equal to 100 per cent of the underpayment owed to each worker. This is being doubled to 200 per cent of the arrears owed if the debt is not settled within 14 days. The maximum penalty will be £20,000 per underpaid worker.

As of April 2016, the new rates will be:

  • 25 years or over  £7.20
  • 21-24                 £6.70
  • 18-20                 £5.30
  • under 18            £3.87

The apprenticeship rate will be £3.30 and is payable to those who are aged 19 years of age or under, or who are in the first 12 months of the apprenticeship.