From Thursday 1 October 2015, the adult rate of the National Minimum Wage (NMW) will rise by 20p.
This is the largest real terms increase since 2008, with more than 1.4 million British workers set to benefit from the increase from £6.50 to £6.70 per hour, as recommended by the Low Pay Commission (LPC) in March 2015 this year.
From 1st October 2015 the new rates will be:
Adult: increase by 20p to £6.70 per hour
Age 18-20: increase by 17p to £5.30 per hour
Age 16-17: increase by 8p to £3.87 per hour
Apprentice: increase by 57p to £3.30 per hour
From April 2016, the new mandatory National Living Wage (NLW) will be introduced for all workers aged 25 and over and will be set initially at £7.20. The NMW will continue to apply to those aged between 21 and 24.
The new National Living Wage is different from the Living Wage, which is an hourly rate of pay set independently by the Living Wage Foundation and is calculated according to the basic cost of living in the UK
Prime Minister David Cameron said the across-the-board increases would offer "more financial security" to workers.
On top of the increases to NMW and NLW, the government has stated its commitment to increasing compliance with minimum wage legislation and its enforcement. The Department of Business, Innovation and Skills scheme to name guilty employers was revised in 2013 to make it simpler to name and shame the employers breaking the law. Employers who pay workers less than the minimum wage not only have to pay back arrears of wages at current minimum wage rates but also face financial penalties of up to £20,000. In the most serious cases employers can be prosecuted.
The new measures emphasise the importance of working with a company you can trust to be compliant across all legislation. The government has plans to work with payroll providers to ensure compliance can be checked effectively. Building Careers UK is happy to offer support and advice to all its partners in light of these changes.
For information please go to https://www.gov.uk/government/news/new-national-minimum-wage-rates-announced
If you need guidance and support in the light of the changes to NMW, please contact us on 01695 556 800.