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Increase to National Living Wage

The cost of employing staff set to rise

Employees over the age of 25 now qualify for the National Living Wage (NLW), which is £7.20 an hour.

This gives workers who were earning National Minimum Wage (NMW) a rise of 50p per hour. That’s a £910 a year increase in earnings for a full-time worker on the current NMW.

Employers below 25 and over 21 will continue to be entitled to NMW of £6.70, 18-20-year olds will get £5.30, under 18s £3.87 and apprentices £3.30.

But from 1 October 2016 NMW rates are set to increase again following recommendations by The Low Pay Commission.

The Government takes a dim view of any employers found to be paying workers below the minimum wage. And even high profile companies can get caught out. Last autumn, Monsoon Accessorize topped name and shame list for failing to pay £104,507.83 to 1438 workers. The error occurred because the company asked staff to buy discounted clothing to wear to work. The cost was taken off their wages, taking them below the legal threshold.

Make sure you’re paying your employees the right amount and take account of any deductions you make for uniforms or equipment so that you don’t end up on the name and shame list.

The National Living Wage website takes you through the steps you need to take to make sure you’re paying your employees enough money.

From April 2017 the NLW and the NMW rate rises will happen at the same time.