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National Minimum Wage 2018 – Avoid the Implications

National Minimum Wage

National Minimum and Living Wage

From April 1st 2018, the National Minimum and Living Wage is set to increase. According to the Low Pay Commission, this will be the largest increase in a decade for 18-20 and 21-24-year-olds.

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2017 – 2018 £7.50 £7.05 £5.60 £4.05 £3.50
April 2018 – 2019 £7.83 £7.38 £5.90 £4.20 £3.70


The Implications

Failing to comply as an employer can lead to hefty fines. In March 2018 a list, published by the Department for Business, Energy and Industrial Strategy, named 179 employers for failing to pay a record 9,200 workers £1.1m collectively.

The name and shame list revealed a few well-known employers. On top of the undisclosed fine, Wagamama had to repay an average of £50 to 2,630 employees and TGI Friday’s repaid £25 to each of its 2,300 staff.

The Business Minister, Andrew Griffiths, said:

“There are no excuses for short-changing workers. This is an absolute red line for this government, and employers who cross it will get caught – not only are they forced to pay back every penny but they are also fined up to 200% of wages owed.”

 A Few Pointers for Employers:

  • Tips received by employees at work cannot legally be counted towards their National Minimum or Living Wage entitlement.
  • You might be underpaying your staff if the employee isn’t paid for work that involves travelling between different assignments.
  • Deductions for items connected with the job must not take a worker below the National Minimum or Living Wage (Safety clothing, tools etc.)
  • Age affects the minimum rate of pay, review employees pay on their birthdays to avoid underpayments.

Are you an employer? Make sure your payroll is updated to ensure employees get paid at least what they are legally entitled to. If you’re not sure what rate you’re paying employees, use this calculator to check.

Karl Thomas, Partner and head of Loosemores HR can advise your business on matters such as this. Karl and the team will ensure your business complies with these obligations, helping to avoid any possible implications.

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