The National Living Wage is Here

National Living Wage

In 2015 the Chancellor, George Osbourne, announced the introduction of a new National Living Wage (NLW) for workers aged 25 years and above, which will see the current minimum rate of £6.70 increase by 50p. Consequently, as of today (1 April 2016) employers need to pay a minimum of £7.20 per hour to any of their workers who are 25 and over. Despite the NLW announcement last year, we have found that many business owners have not prepared for the change, or in some instances, do not know anything about it. It is important that you are aware of how these changes may affect your business as not only will they mean a higher wage bill for you, but in some circumstances can affect pension contributions and which of your employees are eligible.
This change as it is not a choice. It is the law and will be enforced as strongly as the current National Minimum Wage (NMW), which means you could face fines, prosecution and ‘naming and shaming’ for failing to comply.

Please note that NLW is not replacing NMW and the NMW will continue to apply for those employees under the age of 25. The current NMW rates are:

  • £6.70: for 21s and over
  • £5.30: for 18 to 20-year-olds
  • £3.87: for under 18s
  • £3.30: for apprentices (the rate applies to all apprentices in year 1 of an apprenticeship, and 16-18 year old apprentices in any year of an apprenticeship)

If you have any questions on the NLW and how you should be planning for the change, please contact Suda Ratnam at suda@raffingers.co.uk.