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National Living and Minimum Wage Increase – Update and FAQ’s

National Living and Minimum Wage

The National Minimum Wage and National Living Wage is set to increase as of the 1st of April. Is your business prepared?

The current rates and the upcoming increase for the 2019-2020 financial year are as follows:

Year April 2018 (current rate) April 2019
25 and over £7.83 £8.21
21 to 24 £7.38 £7.70
18 to 20 £5.90 £6.15
Under 18 £4.20 £4.35
Apprentice £3.70 £3.90

 

FAQ’s

Can I pay an employee less than the minimum wage, if they are willing to accept it?

No. Workers cannot sign away their rights.

What penalties might we be subject to, if we failed to pay the minimum wage?

You would be served with a notice of underpayment, requiring you to pay the arrears to each named employee and a financial penalty.

Can other benefits count towards minimum wage pay?

Living accommodation is the only benefit that can count towards minimum wage pay. No other kind of company benefit (such as food, a car, childcare vouchers) counts towards the minimum wage. Employers need to ensure that payments such as overtime or bonuses do not count towards the employee’s minimum wage.

Do I have to give everyone in my organisation a pay rise?

The rise only applies to employees whose salary or wage is directly affected by the Minimum and Living Wage. You are not required to offer the same percentage increase to all employees.

Karl Thomas, Partner and Head of Employment at Loosemores commented:

“Make sure your payroll is updated to ensure employees get paid at least what they are legally entitled to and remember that age affects the minimum rate of pay.”

 

If you have any queries relating to the Living Wage and the National Minimum Wage, please contact Karl Thomas to discuss:

Telephone: 029 2022 4433

Email: ThomasK@loosemores.co.uk

Karl Thomas is head of our Loosemores HR service. Karl and the team can help ensure that your business complies with these obligations, helping to avoid any possible implications.

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