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INSIGHT: The new national minimum wages in force 1 April 2016

View profile for Susan Mayall
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New rates for the minimum wage are in effect from 1 April 2016:

Year

25 and over 

(the National Living Wage)

21 to 24

18 to 20

Under 18

Apprentice

April 2016

(current rate)

£7.20

£6.70

£5.30

£3.87

£3.30

(Taken from: https://www.gov.uk/national-minimum-wage-rates.)

Employers should note from the above that a new National Living Wage (NLW) now applies to those aged 25 and over. The NLW effectively acts as a ‘top up’ of wages for those over 25.

The goal of the legislation is to ensure that employers pay people who do work for them at least the minimum wage if they are a “worker” for minimum wage purposes (provided such workers do not come within certain specified exemptions). 

Employers who do not comply with the new NLW will face financial penalties and, if they are companies, could find their directors disqualified.

To help employers understand the definition of “worker”, the extent of the exemptions and how to apply the new rates, the Department for Business Innovation & Skills has also introduced a useful booklet:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/511151/BIS-16-144-nmw-calculating-the-national-minimum-wage.pdf

You might also want to read the BBC’s useful article on this topic too: http://www.bbc.co.uk/news/business-33463231

 For more information or help with applying the rules relating to minimum pay, please contact contact Susan Mayall on 0161 684 6948 or email susan.mayall@pearsonlegal.co.uk

 

Also in this issue of Insight

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers LLP or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.