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National Minimum Wage Increase

Posted October 4, 2016 - Helen in National Living Wage & National Minimum Wage & news

National Minimum Wage - HaytonHeyes

On the 1st October 2016, the changes to the National Minimum Wage were applied:

  • For workers aged 21 to 24 the rate increased to £6.95 (from £6.70)
  • The development rate for workers aged 18 to 20 is now £5.55 (from £5.30)
  • The young workers rate (non-apprentices aged under 18 but above compulsory school age) is £4.00 (from £3.87)
  • The apprentice rate has increased to £3.40 (from £3.30)
  • The accommodation offset limit relates to the maximum value of accommodation provided to a worker which can be deducted from the worker’s minimum wage figure – this has been increased to £6.00 (from £5.35).

The new National Living wage of £7.20 per hour that applies to workers aged 25 and over (introduced on 1st April 2016) will not increase.

Employers do need to ensure that all employees are on the new rate therefore if this has not yet been implemented, back-date from 1st October 2016. Failure to comply can result in arrears payments and penalties, which can be 200% of the amount owed (to a maximum of £20,000) per employee.

Going forward it is expected that all changes for National Minimum wage and the National Living Wage will be uprated together in April, starting in 2017. Future predictions are that the National Living wage will increase to £9.00 per hour by 2020 although the Labour government recently announced they propose that this figure should be £10.00.

Kim says: “these increases have been unusually large and have had an impact on businesses with pressures on rising payroll costs. As a consequence, we have already seen organisations making adjustments to their staffing structures to accommodate these increases. We would urge any businesses looking to restructure, to seek professional guidance to ensure the handling of the situation is compliant with Employment legislation. The last thing a business wants is further cost implications due to the mishandling of changes to employee terms or the failure to follow appropriate consultation processes”

For assistance or guidance, contact Kim or Kerry at HaytonHeyes on 01925 758702 or email kerrym@haytonheyes.co.uk

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